‘D-Day’ for Oracle/PeopleSoft spat

Link: Regulators stall Oracle’s bid for PeopleSoft

PeopleSoft revealed that it had extended the qualifying periods that apply to its customers assurance programme, taking potential liability for the guarantees to $800m.

The programme was launched earlier this year to reassure its users over the viability of its software.

Under the programme, PeopleSoft customers would be entitled to rebates, worth up to five times their licence fees, should PeopleSoft be acquired, and support for its products withdrawn.

The revelation has caused consternation amongst both Oracle and some PeopleSoft customers, both of whom have mounted legal challenges to the programme.

‘PeopleSoft’s latest action is management entrenchment at its worst,’ said Oracle spokesman Jim Finn. ‘These modifications to PeopleSoft’s so-called Customer Assurance Program are not about protecting customers. Instead, they reflect PeopleSoft’s blatant disregard for shareholder value and choice.’

But PeopleSoft said that the programme gave customers guarantees that any firm that bought PeopleSoft would continue to support and develop the software.

‘It only becomes an issue if a company buying PeopleSoft decides not to support our customers in the way we would have. This is good for the customers,’ said Steve Swasey, a spokesman at PeopleSoft.

Oracle has generated numerous headlines since launching its audacious bid for rival PeopleSoft. But it may now be looking for a face-saving way out.

It is possible that antitrust regulators such as the EU may provide them with a route out by blocking the deal. Alternatively, Oracle has told US courts that that the customer assurance programme may force it to withdraw its bid.

Last month, Oracle filed its proposals for acquiring PeopleSoft with European Regulators. A preliminary decision is due today.

‘We have always said that the Oracle bid would face severe antitrust issues,’ said Swasey.

Oracle were approached but declined to comment for this article.

Related reading