Money Bags Sue to Block Oracle-MetaSolv Merger

It’s been awhile since an acquisition Oracle  planned got gummed up in legal works. But when you bid for as many companies as the software giant has in the last three years, some snags are bound to pop up.

Oracle may be on the verge of hitting one of those obstacles in its $219 million bid for software maker MetaSolv.

MetaSolv   said in a filing with the Securities and Exchange Commission that investment group Discovery Partners filed a class action suit against MetaSolv and Oracle to block the merger. The suit alleges that the MetaSolv directors breached their fiduciary duties to MetaSolv’s stockholders in approving the deal.

The group, which filed suit in the district court of Collin County, Texas, last week, said a proxy statement provided to MetaSolv stockholders about the merger contains “insufficient or misleading information.”

The suit calls for an injunction of MetaSolv’s merger with Oracle, along with unspecified monetary damages, according to the SEC filing.

Discovery Partners did not return calls seeking comment.

MetaSolv, which did not return a call seeking comment, said in the filing it believes that the “claims asserted in the petition are without merit.”

Oracle did not respond to questions seeking comment but the company is no stranger to legal travails when it comes to mergers.

The software maker, which has acquired several companies to bulk up both its applications and infrastructure businesses in the last few years, became embroiled in a hostile takeover case when it agreed to purchase rival PeopleSoft Systems in 2003.

PeopleSoft sued Oracle, triggering a fierce fight for possession of the company.

The case dragged on for more than a year and a half, with Oracle ultimately prevailing and paying $10.3 billion, which was double its original bid.

MetaSolv, though also a publicly traded company, is much smaller. The vendor makes software for communications service providers that triggers VoIP, IPTV, VPN, broadband and mobile services, as well as traditional voice and data services.

Oracle expects to close the MetaSolv deal later this year or in early 2007.