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Dec. Hearing Set for Oracle-PeopleSoft Case

Associated Press
Published | Updated

WILMINGTON, Del. – The trial of Oracle Corp.'s (ORCL) attempt to upset PeopleSoft Inc.'s (PSFT) antitakeover measures will continue in December, the judge overseeing the case said Wednesday.

Vice chancellor Leo Strine of Delaware's Court of Chancery said PeopleSoft (search), in particular, is entitled to present evidence on why its board recently rejected an unconditional $24-per-share offer from its software rival.

Oracle's Nov. 1 offer of $24 per share followed a two-week trial in October in Delaware.

The proposed acquirer is seeking a court order invalidating PeopleSoft's so-called "poison-pill" antitakeover measure and a special customer program.

Much of the evidence at the October trial focused on the history of dealings between the two software makers that started when Oracle (search) made a hostile $16.50-per-share offer in June 2003.

That offer was conditioned, as were subsequent offers, as Oracle battled a U.S. Department of Justice attempt to block the proposed combination on antitrust grounds.

Oracle prevailed in U.S. and European antitrust proceedings.

Strine said Wednesday that the November offer requires a new hearing to consider "the reaction of the PeopleSoft board to the unconditional offer and Oracle's application to enjoin the application of the rights plan to that offer."

Strine set hearing dates of Dec. 13 and Dec. 14 to take new evidence on how PeopleSoft's board handled the latest offer.

He will also hear from the lawyers for both sides on the special customer program, which allows PeopleSoft customers unhappy with Oracle's treatment of them in the wake of a takeover to get double or more of their money back.

PeopleSoft says the special customer program was necessary to allow it to keep selling multimillion dollar enterprise software packages to major corporations with the threat of an Oracle takeover looming.

Oracle says the customer program is an impermissible barrier to a deal, one which confronts it with uncertain liabilities that may exceed $2 billion.

PeopleSoft had asked that Strine delay taking new evidence in the case until a point closer to the planned annual meeting at which shareholders could decide to upset the board that has resisted Oracle's overtures.

PeopleSoft also wanted him to hold off taking new evidence on the customer program, so that its sales force could attempt to close critical fourth-quarter deals without the possibility of a court ruling inserting uncertainty into negotiations.

Strine refused to delay continued proceedings until after the New Year, but didn't indicate when he would rule.

Shares of Pleasanton, Calif.-based PeopleSoft traded Wednesday morning at $23.41, up 7 cents, or 0.3 percent, on the Nasdaq Stock Market. Shares of Oracle, based in Redwood City, Calif., traded at $12.81, up 11 cents, on the Nasdaq.