Catz cited PeopleSoft's 2004 performance as the chief reason for what she said is likely to be a decline from the current $21-a-share offering price.
"The direction is down significantly," she said in answer to questions from her own lawyers, who are attacking PeopleSoft's antitakeover defenses in a Delaware courtroom.
A lawyer for PeopleSoft suggested Catz's statements and those from other Oracle executives were part of a continuing effort to use the Delaware trial as a platform to drive the deal price down.
Oracle chief executive Lawrence Ellison (search) took advantage of his turn on the stand last week to warn PeopleSoft shareholders that the offer on the table was likely to be replaced with a lower number.
Under cross-examination by PeopleSoft's attorney, Catz admitted that, prior to the trial, Oracle had made no public statements about the dimensions of an offering price drop.
However, she said, in a recent press release, Oracle said it was taking into account specific liabilities that PeopleSoft was adding in evaluating the deal.
Catz said new financial models are being run. The last models, done in January, expected PeopleSoft to earn about 85 cents a share in 2004.
So far, she said, her sense is that PeopleSoft's 2004 earnings will be "60, 59, 61" cents a share.
"PeopleSoft as a standalone entity is really not viable longer term," Catz said.
Catz's testimony came at the start of the second week of trial of Oracle's legal challenge to PeopleSoft's antitakeover defenses, as the 16-month long acquisition attempt continues.
Shares of PeopleSoft, based in Pleasanton, Calif., traded Monday afternoon at $21.71, down 24 cents, or 1.1 percent, on the Nasdaq Stock Market.
Redwood Shores, Calif.-based Oracle shares traded at $12.23, up 6 cents, or 0.5 percent, also on the Nasdaq.