Oracle bid gets green light
Judge rejects US push to halt PeopleSoft buy
Oracle Corp. won permission yesterday from a federal judge to proceed with its $7.7 billion hostile bid for PeopleSoft Inc., reviving a battle that PeopleSoft said drove customers to competitors.
Oracle founder Larry Ellison prevailed in a fight against the US Justice Department, which sued to stop the bid, saying it would quash competition. The purchase would eliminate Oracle's closest competitor and vault the company to number two in the world from number three among providers of business applications software.
US District Judge Vaughn Walker's decision, after a four-week trial in San Francisco, removes one of the biggest obstacles to the bid. PeopleSoft chief executive Craig Conway fought Oracle's offer, calling it an attempt to "kill" the company.
"They still have a lot of hurdles they have to get over such as getting EU approval and getting PeopleSoft to buy in, so it doesn't necessarily mean its a done deal, but it's a step that way," said Marty Shagrin, an analyst at Key Corp's Victory Asset Management in Cleveland. The firm owns Oracle and PeopleSoft shares.
Walker's ruling agreed with Oracle arguments during the trial that the market for business software has many competitors, including market leader SAP AG, Microsoft Corp., International Business Machines Corp., outsourcing companies and specialty software makers such as Lawson Software Inc.
PeopleSoft said it has previously rejected the offer and will continue with a separate lawsuit in Oakland, Calif., accusing Oracle of trying to sabotage its business.
