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Technology Stocks : Oracle Corporation (ORCL) -- Ignore unavailable to you. Want to Upgrade?

To: robert b furman who wrote (18325)	11/7/2003 1:37:31 AM
From: hueyone	Read Replies (1) \| Respond to of 19079

Dow Jones, Reuters PeopleSoft Faces Shareholder Suit On Refund Offer online.wsj.com By DAVID BANK Staff Reporter of THE WALL STREET JOURNAL Dissident shareholders of PeopleSoft Inc. are seeking to block the Pleasanton, Calif., software company's unusual offer to refund customers' licensing fees in the event Oracle Corp. succeeds in its hostile $7.3 billion takeover bid. In a motion filed Thursday in the Delaware Court of Chancery, the shareholders seek a preliminary injunction to stop PeopleSoft from offering the money-back guarantees. The motion alleges PeopleSoft's "customer assurance program" represents a "nonredeemable poison pill" that effectively prevents PeopleSoft's board from accepting even a sweetened offer from Oracle or another potential buyer. Oracle's bid is effectively on hold pending a review by Justice Department antitrust regulators that is expected to be completed before year end. The potential liability under the refund program more than doubled in the third quarter and totals nearly $800 million, Kevin Parker, PeopleSoft's chief financial officer, said last month. The legal action was triggered by PeopleSoft's subsequent disclosure, in a filing with the Securities and Exchange Commission last week, that it has revised the terms of the refund program. Under the new program, refunds of between two and five times a customer's software license fees will be triggered if PeopleSoft is acquired within two years, rather than one year, and the buyer takes certain actions to reduce product support within four years, rather than two years. "The terms are much more onerous," said Bruce Jameson of Prickett Jones & Elliott in Wilmington, Del., the lead counsel in the shareholder lawsuit first filed in June. "Our interest is in preserving the ability of PeopleSoft shareholders to accept Oracle's offer, or any other offer that comes along, in the event the antitrust concerns are resolved." Mr. Jameson said he was especially concerned because it doesn't appear that PeopleSoft's board could rescind the provision, even in the event of a friendly takeover. A spokesman for PeopleSoft, Steve Swasey, said the suit "lacks merit and we will defend it aggressively." He said he couldn't comment on the reasons for the changes, but said, "We believe that any program that allows customers to buy with assurance is a benefit to our customers and ultimately to our shareholders." Oracle, which has filed a suit in Delaware seeking to lift PeopleSoft's other antitakeover provisions, has previously characterized the money-back refunds an improper "poison pill." Jim Finn, an Oracle spokesman, said: "These new conditions cross the line and show utter disregard for shareholders and customers alike." Write to David Bank at david.bank@wsj.com Updated November 7, 2003 12:04 a.m.