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U.S. won't appeal Oracle ruling
Company clears another hurdle in bid to takeover rival PeopleSoft; shares in both companies jump.
October 1, 2004: 2:44 PM EDT

WASHINGTON (CNN) - The Justice Department announced Friday it will not appeal a federal court decision tossing out its antitrust division's attempt to block Oracle's hostile $7.7 billion takeover bid for rival software maker PeopleSoft.

The decision had been widely awaited.

"We have decided not to appeal the district court's decision. The evidence, including the testimony of numerous customers, strongly supported our case against this proposed transaction," Assistant Attorney General R. Hewitt Pate, said in a statement. "While we disagree with the district court's disappointing decision, we respect the role of the courts in the United States merger review process."

Earlier, PeopleSoft announced that its board had fired CEO Craig Conway, citing a loss of confidence in Conway's ability to continue to lead the company. Dave Duffield, PeopleSoft's founder and chairman, has been appointed CEO.

PeopleSoft (PSFT: up $2.98 to $22.83, Research, Estimates) stock got a boost from both developments, and soared about 14 percent on Nasdaq. Oracle (ORCL: up $0.57 to $11.85, Research, Estimates) shares jumped about 5 percent.

Analysts said the developments make it more likely that up Oracle will finally buy PeopleSoft.

In September, U.S. District Judge Vaughn Walker in San Francisco found that the Justice Department had failed to prove its antitrust case against Oracle.

Oracle then formally renewed its bid to buy PeopleSoft for $21 a share, or about $7.7 billion.

A trial on Oracle's efforts to overturn PeopleSoft's "poison pill" anti-takeover provisions is set to begin in Delaware next week. And the European Commission expects to make a decision on Oracle's bid by the end of the month.

Officials at Oracle and PeopleSoft could not be reached immediately for comment regarding the Justice Department's decision.  Top of page


--CNN Justice Producer Terry Frieden and CNNfn contributed to this report




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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.