On Friday PeopleSoft fired its CEO Craig Conway, who had taken an almost personal interest in erecting hurdles to Oracle’s offer (see separate story) and the US Department of Justice said it will not continue its efforts to block the bid.
The DoJ announced that it will not appeal the September 9 decision of the US District Court for the Northern District of California, which cleared Oracle’s bid, disagreeing with the government’s opinion that the deal would be anticompetitive.
Hewitt Pate, the assistant attorney general in charge of the DoJ’s Antitrust Division said in a statement: While we disagree with the district court’s disappointing decision, we respect the role of the courts in the United States merger review process.
Similarly, while we disagree with some of the legal observations in the district court’s opinion, the ultimate outcome rested on detailed factual findings that would appropriately receive great deference in the appellate process, Pate said.
Oracle welcomed the decision. Chairman Jeffrey Henley said in a statement: This affirms our longstanding belief that the transaction is not anti-competitive. He added that the company is looking forward to pursuing court action against PeopleSoft.
The company has sued PeopleSoft in Delaware to get the company to get rid of its poison pill shareholder rights plan, which is designed to prevent exactly this type of hostile takeover attempt by flooding the market with new shares.
Henley said the court trial, which starts Monday, will focus on PeopleSoft board actions over the past year which have seriously damaged, and continue to damage, shareholder value.
On Friday PeopleSoft sought to distance the DoJ’s announcement from its own announcement that CEO Conway has been replaced due to a lack of confidence from the board. The firm said Conway was dismissed prior to learning of the DOJ’s decision.
PeopleSoft said its suit against Oracle, which alleges the company is trying to disrupt PeopleSoft’s business by misleading PeopleSoft’s customers, is set to go ahead on January 10 next year, in Oakland, California, the company said.
PeopleSoft said its board of directors will meet in due course to review the implications of today’s announcement. The board has rejected all of Oracle’s previous bids, including its current $21-a-share offer, which is below Friday’s closing price of $22.83.
