In an apparent sign that the European Union may oppose
already foundering attempt to acquire rival software maker
, European regulators on Friday issued a "statement of objections" to the hostile takeover.
In a brief statement, Oracle spokesman Jim Finn said: "We are pleased to have clarity on what the commission's key issues are and we will address these issues through our written right of reply and in our hearing testimony. The process is ongoing and we are confident that the commission will see how competitive this business truly is."
Although opposition by the EU has been rumored for months, Friday's statement is apparently the first public acknowledgement that European regulators may well attempt to block the deal.
Finn declined to elaborate and it's still possible that Oracle will satisfy the EU's objections. But PeopleSoft was quick to issue a statement, saying the move is another nail in the coffin of the proposed $9.4 billion deal. "The world's two leading antitrust enforcement agencies have now asserted that the combination of these two companies is anticompetitive," the company said. "PeopleSoft understands that the European Commission's final decision is expected to be issued on or before May 11, 2004."
The takeover attempt is already under fire from the U.S. Department of Justice, which is suing to stop Oracle's bid on the grounds that it would unfairly restrict competition in the market for enterprise software applications. Oracle is challenging the DOJ's contention; the trial is
scheduled to start in June.
Even if Oracle manages to overcome the legal challenges, it still has to contend with PeopleSoft's formidable poison-pill defense and convince the target company's shareholders that the merger is in their interest.
PeopleSoft shares dipped 1 cent to $19.67 in after-hours trading Friday; the stock closed the regular session up 77 cents, or 4%, to $19.68. Oracle shares rose 2 cents to $12.08 after hours; the stock fell 19 cents, or 1.5%, to $12.06 in regular trading.