Oracle’s $9.4 billion bid to purchase Pleasanton,
Calif.-based PeopleSoft got another vote of no
confidence this week.
The Redwood Shores, Calif.-based software vendor said it received a
“statement of objections” from the European Commission (EC) Friday, although
it did not specify what the complaint entailed and would not comment further
than to say it was expecting a clarification from the EC next week. The EC’s
final decision is expected to be issued on or before May 11.
“We are pleased to have clarity on what the Commission’s key issues are
and we
will address these issues through our written right of reply and in our
hearing testimony,” Oracle spokesman Jim Finn said in a statement. “The
process is ongoing and we are confident that the Commission will see how
competitive this business truly is.”
The EC notification comes in the same week Oracle met face to face with
the U.S. Department of Justice in U.S. District Court in San Francisco as
part of a pre-trial proceeding. The DoJ and seven states filed suit to stop
the controversial takeover deal citing anti-completive protection. On
Wednesday, a federal judge scheduled the trial for June 7, two weeks earlier
than both Oracle and the DoJ anticipated. Both sides are scheduled to give
updates in a March 19 phone conference. Lawyers are expected to be back in
the courtroom April 16 to set additional pre-trial motion dates. The trial
date gives each side about 60 days for discovery and to compile a witness
list.
Central to the DoJ’s case is the premise that the number of companies
offering a full array of enterprise resource planning (ERP) tools (Human
Resource Management or Financial Management Services) is currently limited
to three: German-owned SAP , Oracle and PeopleSoft and that
a merger would limit a customer’s choices.
Oracle’s defense is that it competes on the broader software market
facing stiff competition from Microsoft , IBM
and other mid-tier players.
PeopleSoft jumped on the EC news saying the objections supports its Board
of Directors’ position that the proposed combination of PeopleSoft and
Oracle faces substantial regulatory scrutiny and the significant likelihood
that the transaction will be prohibited under antitrust law.
“The world’s two leading antitrust enforcement agencies have now asserted
that the combination of these two companies is anticompetitive,” PeopleSoft
said in a statement.
Analysts say the odds are stacked against Oracle. Even if Oracle were to
prevail against the DoJ, the European Commission would still have to issue
its decision. After that, Oracle would still have to deal with PeopleSoft’s
“poison pill” and a liability around its customer assurance program.
As part of its third-quarter financial statement filed Thursday, Oracle
said it has now spent in excess of $43.4 million in the last nine months
pursuing the controversial deal.