Oracle Socked With Double Whammy On PeopleSoft Bid

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March 12, 2004 (6:09 PM EST)

Oracle Socked With Double Whammy On PeopleSoft Bid

Oracle Corp. received two thumbs down Friday in its hostile bid for rival PeopleSoft Inc., one from the European Commission and the other from a shareholder advisory service.

The EC issued a "Statement of Objections" to Oracle, saying that it supported PeopleSoft's position that the proposed acquisition faced substantial regulatory scrutiny and the likelihood that it would be prohibited under antitrust law. The EC's position was similar to the U.S. Justice Department, which plans to challenge Oracle's bid in federal court on June 7.

The EC's final decision is expected to be issued by May 11.

In addition to the EC, the Institutional Shareholder Services, an influential advisory service, recommended that PeopleSoft stockholders vote for the company's four nominees to the PeopleSoft board: A. George Battle, PeopleSoft President and Chief Executive Craig A. Conway, Frank J. Fanzill Jr. and Cyril J. Yansoumi.

Oracle has submitted its own nominees to stockholders, hoping to gain enough supporters on the board to get approval of the bid for its Pleasanton, Calif.-based rival.

"We are pleased with ISS's recommendation in favor of the PeopleSoft board nominees," Conway said in a statement. "ISS's recommendation supports our board's actions over the past nine months to protect and enhance value for stockholders in the face of Oracle's hostile actions."

Since launching its takeover attempt last year, Oracle, Redwood Shores, Calif., has sweetened its offer twice in an attempt to entice stockholders. Oracle's current bid is valued at $9.4 billion.