U.S. judge rules in Oracle's favour

Federal judge rejects government's bid to block Oracle's hostile bid for PeopleSoft on anti-trust grounds

Oracle has won the latest battle in its attempt to swallow rival PeopleSoft.

On Sept. 9 a federal judge in California rejected an attempt by the U.S. Department of Justice to block Oracle’s takeover of PeopleSoft. U.S. District Judge Vaughn Walker said the government failed to prove its anti-trust case.

The Department of Justice filed suit on Feb. 27, charging Oracle’s bid would eliminate one of three major players in the market for software sold to large organizations to manage finance, HR, sales force and other functions.

Oracle said the decision by the court “removes a significant roadblock to the acquisition.”

“This decision puts the onus squarely on the board of PeopleSoft to meet with us and to redeem their poison pill so that the shareholders can accept our offer,” said Oracle chairman Jeffrey O. Henley in a statement.

Oracle has offered $21 US for all of PeopleSoft’s shares, a 17 per cent premium over the $17.95 US closing price of PeopleSoft on Sept. 9 and a premium of 39 per cent to close of market on June 5, 2003 — the day before Oracle announced its intentions to acquire PeopleSoft.

But PeopleSoft’s stock soared during after hours trading in the wake of the federal judge’s decision, rising to $20.58 US in after-hours trading.

PeopleSoft has vigorously opposed the hostile takeover attempt, stating that Oracle’s offer is inadequate and doesn’t reflect the true value of the company. Its board of directors has unanimously rejected every overture by Oracle.

For more on the Oracle/PeopleSoft battle, click on the related articles links below.

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