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Report: Rebates may force Oracle to drop PeopleSoft bid

Report: Rebates may force Oracle to drop PeopleSoft bid

Oracle may have to drop its takeover bid for rival PeopleSoft if PeopleSoft starts a customer refund offer that would make the buyout economically prohibitive, according to a published report.

Oracle asked a Delaware court to expedite an injunction request against the rebate program Monday, saying that if the program goes ahead it may have to withdraw its US$7.3 billion offer for PeopleSoft, The New York Times said Tuesday in its online edition.

PeopleSoft introduced its "customer assurance program" shortly after Oracle announced its takeover offer last June, offering customers in some cases rebates of up to five times the price they paid for PeopleSoft software if the company was acquired and those products were discontinued.

Oracle has asked the Delaware Court of Chancery for an injunction against the program, saying that it reflects "PeopleSoft's blatant disregard for shareholder value and choice."

Oracle has said that the program could add up to $800 million in rebate fees, according to the report.

Representatives for PeopleSoft and Oracle in the U.K. declined to comment on the news Tuesday.


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