Hearing Delayed in Oracle Lawsuit

Oracle Corp. announced Tuesday that a key court hearing in its $6.3-billion hostile bid for rival business-software maker PeopleSoft Inc. has been indefinitely postponed by mutual agreement.

A hearing had been scheduled for July 16 in Delaware Chancery Court to hear arguments in an Oracle lawsuit alleging that PeopleSoft’s board breached its fiduciary duty to stockholders by resisting the company’s unsolicited offer of $19.50 a share.

The decision to delay the hearing came a day after the Justice Department effectively froze Oracle’s offer by demanding more information about how the proposed PeopleSoft takeover would affect competition in the $20-billion market for business-applications software.

Oracle’s offer remains on ice until the Redwood City, Calif.-based company responds to regulators’ request. Oracle hasn’t estimated how long it would take to answer all the questions, but antitrust experts have warned it could take months.

The two sides scheduled a July 25 status hearing to update the Delaware court.

Meanwhile, Pleasanton, Calif.-based PeopleSoft repeated its opposition to Oracle’s takeover bid in a letter to shareholders.

“We believe the tender offer Oracle has made poses extraordinary risks and is destructive to shareholder value,” PeopleSoft said in the letter, released Tuesday.

It added that the Justice Department probably would block the combination for being anti-competitive.

Oracle spokeswoman Jennifer Glass dismissed the PeopleSoft letter as “another effort to detract attention from the tangible benefits of our offer,” which, she said, “will substantially benefit” PeopleSoft shareholders and customers.

Oracle’s offer is nearly $2 more than PeopleSoft’s share price. The stock closed Tuesday at $17.79, up 23 cents. Oracle shares rose 32 cents to $12.33. Both trade on Nasdaq.

While it fights to fend off Oracle, PeopleSoft is pushing to complete its acquisition of J.D. Edwards & Co. It urged shareholders to back that deal, saying it would allow the combined companies to sell their products to a broader range of large and mid-sized companies. That cash and stock offer was valued at $1.75 billion when announced.

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Associated Press and Reuters were used in compiling this report.