Just as PeopleSoft's chief all but predicted, the U.S. Department of Justice - joined by attorneys general from seven states - sued to block Oracle's $9.4 billion hostile takeover bid Feb. 26, saying the takeover would injure competition for human resource and financial management software. "We are very confident we have done the right thing and have a strong case," Justice spokesman R. Hewitt Pate told a press briefing. "We look forward to presenting it."
PeopleSoft chief executive officer Carl Conway applauded the filing, saying if Oracle challenges it, this would only confirm PeopleSoft's position that their real motive is to damage - if not destroy - his company. "[Justice] did an enormous amount of research," he told the Washington Post. "It is time now to accept the decision from the party responsible for making it," meaning it is time for Oracle to accept that PeopleSoft does not want the merger.
Accepting that, however, seemed the last thing Oracle boss Larry Ellison has in mind. He has said in the past that Oracle would fight any government bid to stop the takeover bid he launched last summer. "We believe that the government's case is without basis in fact or in law," said Oracle spokesman Jim Finn, "and we look forward to proving this in court."
But one of the attorneys general joining the lawsuit, New York's Eliot L. Spitzer, said taking PeopleSoft out of the market would mean lost incentive for Oracle to offer lower prices, better services, and more innovation. "Only Oracle and SAP," Spitzer said in a statement, "would have the experience to provide these types of applications to the largest enterprises."
