Oracle refuses to give up hope on takeover

Oracle refuses to give up hope on takeover

By Stuart Finlayson

Responding to last week's blow to its bid for PeopleSoft, when it emerged that U.S. Department of Justice staff were to recommend to the Assistant Attorney General that Oracle's takeover should not be approved due to anti-competitive concerns, Oracle's legal team has issued a defiant statement saying that the matter is far from done and dusted.

James Rill, of Howrey, Simon, Arnold & White, who are acting as legal counsel for Oracle in the takeover battle, said of the antitrust staff's recommendation: "The decision on Oracle's merger will be made by the Assistant Attorney General with the assistance and advice of his staff and deputies. It will take into account not only the recommendation of the investigating staff, which we understand was forwarded to the Assistant Attorney General today, but also facts and arguments presented to senior Division decision makers by the merging parties. Over the course of my 45 years of antitrust practice I have seen many instances in which the Assistant Attorney General's decision differed from that recommended by the investigating staff, including several instances during my three years as Assistant Attorney General. In my experience, the Assistant Attorney General will take ample time to review the facts of this situation with an open mind and meet with Oracle before coming to a decision on the matter. This process simply is not complete."

Oracle spokesman Jim Finn went further, with the now somewhat incredulous inference that it was PeopleSoft's CEO Craig Conway – who is vehemently opposed to Oracle's offer – who first mooted the prospect of merging the two companies' applications businesses.

"The initial proposal to merge PeopleSoft's applications business with Oracle's applications business came from PeopleSoft CEO Craig Conway, who proposed that he was the best person to run the combined companies' applications business and never mentioned any antitrust concerns. However, when Oracle countered by proposing to buy PeopleSoft, Conway said that he wouldn't sell at any price. He then began a long and intensive lobbying effort aimed at persuading the Antitrust Division of the U.S. Department of Justice to block the deal. PeopleSoft's lobbying resulted in complicating and prolonging the Justice Department review of the merger. While no decision has yet been made, Oracle believes this merger will eventually be approved."

In related news, Oracle Co-President Charles Phillips is to address PeopleSoft's largest customer group at the end of the month to outline what the company's takeover plans will mean for them.

While Phillips will be at the gathering of Quest, taking place in San Diego on February 29th, ironically there will be no representation from PeopleSoft at its own user conference, following a fall out between the event organisers and PeopleSoft over the structure of the event.

Quest is comprised of around 15,000 members, most of who use the EnterpriseOne and PeopleSoft World applications that were formerly owned by J.D. Edwards, which was acquired by PeopleSoft last year.

Quest President Barb Schmit said that by extending and invitation to Oracle to speak at the meeting, Quest was not coming out in support of the proposed acquisition, but instead simply giving their members, who have inundated Quest with concerns over the impact of the merger, an opportunity to hear what the proposed deal will mean for them from the horses mouth.

"As a user group, our number one priority is that customers have their concerns addressed. That is the reason we have provided a forum for both PeopleSoft and Oracle to deliver information on their plans for World and EnterpriseOne users. We are not taking a stand to support the acquisition, but instead wish to get factual information about what it might mean to those of us who only last year experienced the uncertainty of moving from being J.D. Edwards customers to becoming PeopleSoft customers."

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