Jun 30, 2003 (11:06 AM EDT)
Oracle Prepares To Address Justice Department's Concerns

Read the Original Article at InformationWeek

As expected, the U.S. Department of Justice has asked Oracle to submit more information regarding its unsolicited bid to buy PeopleSoft Inc.

Such a request indicates that regulators may have some concerns about Oracle's hostile takeover bid, which is now valued at about $6.3 billion, because of antitrust issues. If Oracle were to succeed in the takeover, there would be only two dominant vendors in the high-end enterprise applications market, which is primarily served by Oracle, PeopleSoft, and SAP.

An Oracle spokesman said in a written statement that the company was not surprised to receive the request but added that "it is important not to confuse process with outcome. The Department of Justice received the case less than two weeks ago, and it could not evaluate the highly fragmented enterprise software marketplace in such a brief time." The spokesman said Oracle is optimistic that the Justice Department will conclude the bid is not anti-competitive.

The second request will mean Oracle will have to re-up its offer for PeopleSoft, which will expire July 7. It also means PeopleSoft will have more time to complete its $1.75 billion acquisition of J.D. Edwards & Co. But that merger could also face scrutiny; the Justice Department has two more weeks to decide whether to seek more information on that deal.

PeopleSoft continues to fight Oracle's bid. Its board of directors has rejected the offer and has recommended shareholders do the same. PeopleSoft also last week retained the services of attorney Gary Reback with Carr & Ferrell in Palo Alto, Calif. Reback is most notable for his antitrust crusade against Microsoft in the 1990s while working with well-known Silicon Valley law firm Wilson Sonsini Goodrich & Rosati. He was pivotal in blocking Microsoft's acquisition of Intuit and later helped spur the Justice Department's investigation of Microsoft for antitrust violations.