Updated from 9:57 a.m. EDT
investors who bristled at the bare-knuckled anti-takeover defenses deployed against
won a minor legal victory Wednesday when the company agreed not to apply them indiscriminately in future battles.
PeopleSoft said it was settling a class-action suit by agreeing that a special customer-refund program, which would have made it about $800 million more expensive for Oracle to buy the company, will apply only to Oracle if it is extended past June 30. The agreement is largely moot following a decision by U.S. authorities to oppose the takeover on antitrust grounds, although the program -- which was suspended once in April -- continues to exist.
The plaintiffs had argued that the refund plan -- dubbed a "customer assurance program" by PeopleSoft -- unfairly discouraged potential corporate suitors who might one day propose a takeover that shareholders supported. The agreement announced Wednesday appears to be a compromise that recognizes, among other things, that Oracle has recently lowered the proposed value of its bid, a step that followed the antitrust defeat and looked like the final nail in the offer's coffin. PeopleSoft reiterated its opposition to the offer in a separate release Wednesday morning.
"This settlement puts the stockholder litigation behind us," PeopleSoft said. "We are pleased that the stockholder plaintiffs recognize the legitimacy of the customer assurance program. We believe the program assures customers of the soundness of their investment in PeopleSoft products and stockholders that the value of their investment is protected."
PeopleSoft also agreed to amend a poison-pill takeover defense to make it exercisable over the next two years only by the board's independent directors, and said stockholder nominations to the board will have a later deadline than in the past, a step that would ease the burden of waging a proxy battle for the company.
The company's board of directors also unanimously recommended that shareholders reject Oracle's latest takeover bid of $21 a share. Oracle lowered the bid $5 a share earlier this month.