PeopleSoft loses millions over Oracle

PeopleSoft has revealed to the Securities and Exchange Commission that it has lost over US$70 million trying to avoid Oracle's hostile takeover bid through using internal resources to respond to the offer.

The business applications software vendor has spent money on investment banking, legal and other fees between June 2003 until June 30th this year to pay for the related lawsuits.

PeopleSoft also predicts that it is looking at spending the same amount of money in the future, if not more, to fend off the proposed US$7.7 billion bid.

Oracle has spent US$54.2 million on fees to acquire PeopleSoft, which has accounted for one of the three main reasons why the company has received an increase in general and administrative expenses this year.

The U.S. Department of Justice took the potential merger to trial earlier this year, looking for a federal injunction to block the deal.

Oracle is expected to go trial on Sept 27th and is also responding to a similar antitrust investigation by the European Commission. If the Commission blocks the merger, this could kill the deal too.

If PeopleSoft launches another defence against a takeover, involving the customer assurance guarantee program, this could add another US$2.02 billion to Oracle's ambition to buy the company.

This program requires PeopleSoft customers to be paid up to five times their licence fees if the company is acquired, support is decreased within two or four years from the date of purchase.

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