Updated from 12:54 p.m. EST
A Delaware judge has delayed a decision on
antitakeover tactics Wednesday and set hearings for December to receive evidence on why the software maker rejected rival
latest $24-a-share bid, according to wire reports.
In addition, the same judge on Wednesday declined to approve the settlement of a separate suit by PeopleSoft shareholders because he said it unfairly blocked their ability to sue over the company's resistance to Oracle's takeover.
Delaware Chancery Court Vice Chancellor Leo Strine Jr. set hearings for Dec. 13 and Dec. 14 to give PeopleSoft the opportunity to explain its position on Oracle's November $24-a-share bid, which Oracle called its "best and final offer." The PeopleSoft board rejected that bid after the company's shareholders tendered more than 60% of PeopleSoft's shares in support of Oracle's $9 billion offer.
According to the
, Strine said Wednesday the November offer requires a new hearing to consider "the reaction of the PeopleSoft board to the unconditional offer and Oracle's application to enjoin the application of the rights plan to that offer."
Strine also will hear from both sides on PeopleSoft's controversial money-back guarantee program, which promises customers double or more their money back under certain circumstances surrounding a takeover.
Oracle is hoping that Strine will remove PeopleSoft's poison pill provision so that it can move ahead with an acquisition without a costly proxy fight lasting into the spring. But many observers believe the judge is more likely to uphold the measure given that no Delaware court has removed a poison pill since the late 1980s. The poison pill automatically dilutes the company's shares, making a takeover prohibitively expensive.
The judge's decision to hold more hearings in December means that Oracle will have to start the wheels rolling for a proxy fight because its deadline for turning in an alternative slate of candidates for the PeopleSoft board is Thursday. The votes would be counted at PeopleSoft's annual shareholder meeting, which must be held before the end of April.
PeopleSoft had asked Strine to delay in taking new evidence in the case until a point closer to the shareholder meeting; Strine refused to delay the proceedings until after the new year but didn't indicate when he would rule, the
Separately, Strine rejected a settlement signed June 17 between PeopleSoft and shareholders who sued the company charging allegations of wrongdoing by management similar to those alleged by Oracle in its suit, the
reported. The settlement contained no monetary damages but instead contained agreements that were meant to guarantee PeopleSoft was not unfairly ducking good offers from potential acquirers.
But Strine was reported as saying that the fundamental flaw of the settlement agreement was its failure to account for developments after the date the pact was signed. Indeed, the same attorneys pushing for approval of the settlement agreement also are seeking permission to file a supplemental complaint challenging the proprietary of the latest rejection from PeopleSoft's board.
AP quoted Strine calling the offer of $21 a share that was in place at the time of the Oracle trial in October "a responsible level," adding that it was "certainly not ludicrous." The more recent $24-a-share offer is what Strine called an "all-shares, premium offer that's unconditional."
However, the judge was quoted saying that it might be tough for PeopleSoft shareholders to prove the board wrongly rejected Oracle's overtures when pending antitrust actions could have prevented Oracle from closing the deal. That antitrust excuse fell by the wayside after another judge sided with Oracle and ruled against the Department of Justice's claim that the acquisition would violate antitrust regulations.
Shares of Oracle recently rose 4 cents, or 0.3%, to $12.74, while shares of PeopleSoft edged up 7 cents, or 0.3%, to $23.41.