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2/12/2004

DOJ: Block Oracle’s bid to buy PeopleSoft Inc.

The Associated Press

SAN FRANCISCO — Business software maker Oracle Corp. lost an important round when the Justice Department recommended blocking its proposed $9.4 billion takeover of rival PeopleSoft Inc., but the fight still isn’t over.
Just how badly Oracle has been hurt by Tuesday’s recommendation will hinge on how much clout the advice carries with Assistant Attorney General R. Hewitt Pate, the head of the Justice Department’s antitrust department.
He will make the final decision, due by March 2, on whether there’s ample reason to stand in the way of Oracle’s $26-per-share bid for PeopleSoft.
Until Pate decides, Pleasanton-based PeopleSoft appears to have regained the upper hand in its eight-month slugfest with Oracle.
The momentum shift comes less than a week after Redwood Shores-based Oracle stepped up the pressure on PeopleSoft by raising its all-cash bid by 33 percent in a move many analysts predicted would seal the deal.
Yet PeopleSoft’s stock price has continued to trade well below the higher bid, reflecting investor pessimism about Oracle’s prospects for gaining antitrust approval.
PeopleSoft’s board dampened the takeover hopes even further Monday by calling the new bid inadequate.