Euro regulators deal further blow to Oracle
Euro regulators deal further blow to Oracle
Regulators at the European Commission have arrived at a similar conclusion to their counterparts at the U.S. Department of Justice in voicing their opposition to Oracle's proposed hostile takeover of rival software maker PeopleSoft, casting further doubt on the success of the bid.
While the European Commission has made its objections known to Oracle, it has also given the company an opportunity to respond to the objections in the form of a letter and an oral hearing, before the regulators deliver their final decision, which is expected by mid-May.
Rather than bitterly criticise the decision, as it did when the U.S. Regulators made their thoughts on the matter public, Oracle chose to respond in a conciliatory fashion, perhaps conscious of the importance of not getting the regulators offside while it has the opportunity to change their minds.
"We are pleased to have clarity on what the Commission's key issues are, and we will address these issues through our written right of reply and in our hearing testimony," said Oracle spokesman Jim Finn, in a statement. It went on: "The process is ongoing, and we are confident that the Commission will see how competitive this business truly is."
PeopleSoft also issue a statement in reaction to the EC's findings, which read: "The European Commission's issuance of its Statement of Objections supports the PeopleSoft Board of Directors' position that the proposed combination of PeopleSoft and Oracle faces substantial regulatory scrutiny and the significant likelihood that the transaction will be prohibited under antitrust law. The EC action is consistent with the case filed by the United States Department of Justice and seven states challenging this transaction, which is scheduled to go to trial on June 7, 2004.
"The world's two leading antitrust enforcement agencies have now asserted that the combination of these two companies is anticompetitive."
Meanwhile, PeopleSoft received another welcome boost, with a leading shareholder advisory service stating that it would recommend that its clients re-elect PeopleSoft's directors.
Institutional Shareholder Services (ISS) said it made the decision in light of what it feels was the correct decision taken by PeopleSoft's Board to reject Oracle's offer, given that its misgivings over the anticompetitive nature of such a transaction have now been borne out on both sides of the Atlantic.
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