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Oracle Bid for PeopleSoft Faces Longer EU Review

November 18, 2003|From Times Wire Services

European regulators said Monday that they would extend their review of Oracle Corp.'s hostile $7.5-billion offer to buy rival PeopleSoft Inc., fearing the combined company could dominate some software markets for large businesses.

"The initial one-month investigation has shown that the combination of two of the largest competitors in the market merits further analysis," the European Commission, the executive arm of the European Union, said.

The investigation will focus on so-called enterprise application software, which is widely used by multinationals in coordinating financial planning, human resources, customer relations and supply chain management.

A merger would help Oracle, the world's third-largest software maker, take back the No. 2 spot behind Germany's SAP in the market for accounting, payroll and inventory software.

The commission has four months to decide whether it will block the takeover or demand concessions. The panel's decision was not unexpected, given that the U.S. was still studying the planned merger.

The U.S. Department of Justice has told Oracle its inquiry may extend into January, according to Chuck Phillips, an Oracle executive vice president.

Shares of Redwood City, Calif.-based Oracle fell 20 cents to $12.09 on Nasdaq. Shares of PeopleSoft, in Pleasanton, Calif., fell 25 cents to $20.79, still above Oracle's $19.50-a-share offer.

Also Monday, PeopleSoft corrected a regulatory filing from last week, saying a change in control of its board would not automatically trigger millions of dollars in refund payments to customers. Under the new language filed, refunds would kick in only when a change in board control leads to the sale of PeopleSoft.

Oracle last week claimed in its revised lawsuit against PeopleSoft that the refund program could make it prohibitively expensive to complete its proposed takeover.

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Associated Press, Reuters and Bloomberg News were used in compiling this report.

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