PeopleSoft files lawsuit against Oracle
PeopleSoft has sued Oracle Corporation to put an end to what it characterises as a sham tender offer aimed at destroying PeopleSoft's business. The complaint, filed in Alameda County Superior Court, alleges that Oracle has engaged in unfair business practices, trade libel and tortious interference with PeopleSoft's customer relationships.
According to the suit, Oracle's true intent in making the tender offer was to undercut PeopleSoft's business operations by disparaging PeopleSoft's products, services, and future prospects, undermine PeopleSoft's viability by creating uncertainty and doubt in the minds of PeopleSoft's customers and prospective customers, and interfere with PeopleSoft's plan to merge with J. D. Edwards and Company.
PeopleSoft also alleges that Oracle's accompanying media campaign grossly misleads the market concerning Oracle's ability to provide continuing support to existing PeopleSoft customers, and fails to disclose the substantial obstacles and costs facing PeopleSoft customers that would need to migrate to an Oracle platform. The misrepresentations by Oracle in various press releases, conference calls, and other communications are alleged to be a part of a scheme to freeze customer purchase decisions, and to adversely affect PeopleSoft's end-of-quarter sales.
'By making an offer with the acknowledged intent of eliminating PeopleSoft's business, Oracle seeks to disrupt PeopleSoft's efforts to complete new sales, thus, effectively damaging PeopleSoft's business even if Oracle never buys a single share of PeopleSoft stock,' said Craig Conway, PeopleSoft's President and Chief Executive Officer.
Mr. Conway also reaffirmed PeopleSoft's plan to move forward on its merger with J.D. Edwards. 'We intend to compete vigorously in the marketplace, and complete the merger with J.D. Edwards, despite Oracle's unlawful efforts to destroy competition,' Mr. Conway concluded.
The lawsuit seeks an injunction barring Oracle from proceeding with its tender offer, as the only way that PeopleSoft's business can be protected.
On June 6, Oracle announced that it was to commence a cash tender offer to purchase all of the outstanding shares of PeopleSoft for $16 per share, or approximately $5.1 billion.
Commenting on the litigation, Oracle Chairman and Chief Executive Officer, Lawrence J. Ellison said that the matter 'would ultimately be decided by the PeopleSoft stockholders based on the merits (of the deal) and not by frivolous litigation.'