PeopleSoft CEO Says Terms Hurt Oracle Bid

PeopleSoft Inc. might have considered Oracle Corp.’s unsolicited takeover proposal more seriously if some of the terms were different, PeopleSoft’s founder and chairman said in a videotaped deposition played Tuesday in a Delaware court.

Chairman David Duffield said that if Oracle dropped some of the conditions attached to its proposal and was committed to selling, supporting and enhancing PeopleSoft products, PeopleSoft’s board probably would evaluate it more seriously.

Duffield took the additional role of chief executive Oct. 1 after the board fired Craig Conway, who had loudly opposed a takeover by Oracle at any price. Investors have debated feverishly since then whether PeopleSoft will now be more willing to hold talks with Oracle.

Duffield said PeopleSoft did not ask its advisors for a fairness opinion on Oracle’s initial June 2003 offer of $16 a share or its increased bid of $19.50 a share made soon after.

When Oracle upped the ante to $26 a share early this year, PeopleSoft’s advisors concluded “that the offer was inadequate,” Duffield said during the deposition, which was taped Aug. 18.

Oracle’s current bid stands at $21 a share, which would value PeopleSoft at about $7.7 billion. The tender offer is valid until Oct. 22.

Oracle has filed suit against PeopleSoft in Delaware Chancery Court seeking to repeal PeopleSoft’s anti-takeover protections, with a focus on an unusual customer assurance program that could create huge liabilities for Oracle if it was successful in its bid.

Pleasanton, Calif.-based PeopleSoft on Tuesday extended the expiration date on a version of the assurance program, which could force Redwood City, Calif.-based Oracle to pay PeopleSoft customers two to five times the cost of their software if Oracle’s post-merger software support and updates don’t meet certain guidelines.

On Nasdaq, PeopleSoft shares fell 26 cents to $21.57 and Oracle slipped 5 cents to $12.15.