PeopleSoft to End Refunds

With an Oracle takeover less of a threat, the controversial money-back guarantee will expire.
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With the specter of a hostile takeover by

Oracle

(ORCL) - Get Report

looking unlikely,

PeopleSoft

(PSFT)

on Friday said it has allowed a controversial money-back guarantee program to lapse.

The program was, in effect, a guarantee to PeopleSoft customers that, in the event Oracle or another company took over PeopleSoft and failed to support PeopleSoft software products or failed to meet other related conditions, the acquiring company would refund their license payments.

The guarantee would have cost Oracle about $800 million.

PeopleSoft spokesman Steve Swasey said that customers who purchased software prior to March 31 are still covered by the guarantee, but new customers will not be covered. He didn't know if the company's board of directors was planning to revive the program.

"This program has never been about customer assurance," an Oracle spokesman said the last time the program was renewed. "It has always been about entrenching the PeopleSoft management team."

The $9.4 billion takeover attempt has been blocked by the U.S. Department of Justice, which called the merger anticompetitive. Oracle is seeking to reverse the DOJ's action via a lawsuit in federal court. European regulators have already signaled their

preliminary opposition to the deal, and are meeting this week in Brussels to hammer out a final position.

On Friday, PeopleSoft shares rose 41 cents, or 2.2%, to $18.97, while Oracle gained 28 cents, or 2.3%, to $12.58.