PeopleSoft has amended its spate of lawsuits against would-be buyer Oracle to include new charges that Oracle deliberately interfered with its customer relationships.
The move comes amid increasing doubt that Oracle can overcome two significant obstacles to its proposed takeover of PeopleSoft: regulatory squeamishness about the bid and apparent shareholder reluctance to sign on to the deal at current price levels.
PeopleSoft said the complaint, much of which has been sealed by the Superior Court in Alameda County, California, which will hear the case, contains “extensive new facts about Oracle management’s ongoing acts of unfair trade practices, including its efforts to disrupt PeopleSoft’s customer relationships.”
The company said the lawsuit will reveal new information about what it calls a “deliberate campaign to mislead customers” about Oracle’s plans for long-term support of PeopleSoft products.
Oracle quickly released a statement saying that although it is “not surprised” by the amended suit, executives have not seen the complaint in its entirety and will withhold comment until they do.
“It does not change our commitment to acquire PeopleSoft,” said Oracle spokesperson Jim Finn.
However, it conceivably could change the likelihood of a completed deal. In addition to previously boosting the size of its offer to US$19.50 per share, or about $7 billion in total, Oracle has twice extended the deadline for shareholders to accept its offer. Shareholders now have until mid-September to make a decision — a window designed to give regulators time to decide if they will let the merger go through.
Fear and Doubt
“Every time another event that raises doubt comes along, it makes the whole outcome all the less certain,” Gartner analyst Betsy Burton told the E-Commerce Times.
The fact that Justice Department regulators have asked for more information about the Oracle takeover is a major hurdle, she added, and PeopleSoft’s ability to swiftly close its own purchase of J.D. Edwards also may have given shareholders reason to believe the company’s stock is worth more than Oracle is offering.
“It’s clear there has been disruption and confusion among customers and would-be customers,” Burton said. “Whether or not that came about as a result of deliberate action is something the courts will have to figure out.”
Now the Good News
Despite the uncertainty surrounding its PeopleSoft bid, Oracle actually helped drive the stock market higher in early trading Wednesday.
In the wake of an upgrade from Merrill Lynch, which said it believes the company is in a good position to capitalize on economic growth, Oracle’s share price rose more than 3 percent to $11.66.