Justice Dept puts brakes on Oracle/PeopleSoft battle


As expected, the US Justice Department has slowed down Oracle?s planned takeover of PeopleSoft by requesting additional information about its impact on the market.

An Oracle spokesman said that the company had expected a request for additional information which comes after an initial two-week review of the proposed deal under the usual Hart-Scott-Rodino antitrust act.

"We were not surprised given the size and scope of the transaction and the fact that PeopleSoft is also proposing its own transaction, which is undergoing regulatory review. It is important not to confuse process with outcome," he said. "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. We remain optimistic that the Department of Justice will conclude that this transaction is not anti-competitive, and that we will complete the transaction in a timely manner.?

PeopleSoft siezed on the decision to investigate further as validation of its own claims that the takeover would breach anti-trust regulations. "PeopleSoft has consistently maintained that the proposed combination of PeopleSoft and Oracle faces substantial regulatory delays and a significant likelihood that the transaction would be prohibited," the company said in a statement.

Meanwhile others are predicting this will be long haul with the battle to determine PeopleSoft?s fate lasting until late August, according to the CEO of JD Edwards Bob Dutkowsky, whose own customers are waiting to find out if their supplier?s planned merger can go ahead.

Dutkowsky said he?s still ploughing ahead to close the deal to merge with PeopleSoft that was planned before Oracle launched its $6.1 billion hostile takeover attack. "We're working around the clock to get the contract and definitive agreement we have with PeopleSoft closed," he saidl. "This is going to unfold over the next four to six weeks."

Meanwhile JD Edwards customers seem almost completely opposed to any prospect of being part of an Oracle takeover of PeopleSoft according to a poll conducted by the company?s Quest user group. Some 96 per cent of JD Edwards customers polled by Quest indicated that, if Oracle acquired PeopleSoft after it had acquired JD Edwards, JD Edwards' users feared they would be left out in the cold.

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