The European Commission has announced it intends to object to Oracle's $9.4 billion hostile takeover bid for PeopleSoft.
In a "statement of objections" delivered to Oracle, the Commission provided a detailed list of concerns about the merger. Oracle now has until 11 May 2004 to respond before the commission issues a final ruling.
Assuming the ruling goes against Oracle, the company can appeal, but the this could take as long as two years to be completed. Oracle is already preparing for a 7th June trial against the US Justice Department. "The process is ongoing and we are confident that the Commission will see how competitive this business truly is," said Oracle in a written statement.
Meanwhile PeopleSoft staved off another potential problem at its annual shareholder meeting when Institutional Shareholder Services, which advises large investors on proxy votes, came out in support of the existing board.
ISS was feared to be set to go against the board because of the controversial rebate program PeopleSoft created to fight Oracle and which currently carries liabilities of more than $1.5 billion. ISS said the scheme "stretches the boundaries on what is acceptable".
But it added: "Given the facts and circumstances at the time and in advance of the DOJ ruling, the directors of this board appear to have acted in a manner consistent with fulfilling their obligations to shareholders."