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Oracle may abandon PeopleSoft bid
Report: Software firm says its $7.3B bid may not be viable after PeopleSoft revised refund program.
November 11, 2003: 8:10 AM EST

NEW YORK (CNN/Money) - PeopleSoft Inc. may have found a way to ward off Oracle Corp.'s $7.3 billion hostile takeover bid, but at a price.

In a filing with a Delaware court, Oracle said that a revised PeopleSoft program to offer its customers refunds of up to two to five times license fees may force it to abandon its bid for the company as it will "no longer be economically viable," the Wall Street Journal reported.

Last month, PeopleSoft said its potential liability under the revised refund program totaled nearly $800 million at the end of the third quarter.

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PeopleSoft's (PSFT: Research, Estimates) new program for the refunds goes into effect if the company is bought within two years, instead of one year under the original program, and the buyer of the company takes actions to reduce support for PeopleSoft products within four years, rather than the original two years, according to the paper.

Oracle (ORCL: Research, Estimates) is asking the Delaware court to speed up an injunction against PeopleSoft's new refund program. Oracle is also focusing on a provision that says the refunds will be triggered by a change in control of PeopleSoft's board, the Journal reported.

Some PeopleSoft shareholders have also filed a motion to block the revised refund program, but the company spokesman said the plan is "good for customers, and ultimately good for shareholders," according to the paper.  Top of page




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