Oracle ups its bid for PeopleSoft

Oracle has upped its cash bid for rival enterprise application maker PeopleSoft to $6.3bn, claiming that a successful deal will allow it to compete with Microsoft and SAP.

PeopleSoft shareholders will be offered $19.50 per share, up from the previous $16, as Oracle attempts to convince them that its offer is genuine and represents the best deal.

"We are committed to a successful conclusion of this bid. We believe it is in the best interests of PeopleSoft's shareholders and customers," said Jeff Henley, chief financial officer of Oracle.

Oracle promised PeopleSoft's customers that it would continue to offer them support and additional PeopleSoft software where needed. It has also promised a free licence upgrade for its own business applications.

But Oracle will not sell PeopleSoft products to new customers, and will not continue development.

The move intensifies the pressure on PeopleSoft's board, which had called for shareholders to reject the initial offer, and tried to dismiss Oracle's bid as an effort to thwart its proposed deal with JD Edwards.

But by increasing its offer for PeopleSoft, Oracle has underlined its intent.

Acquiring PeopleSoft would cement Oracle's position as a "significant competitor to Microsoft and SAP", said Henley.

Meanwhile, PeopleSoft has been trying to press ahead with its plans to acquire JD Edwards. This week it increased its offer to JD Edwards' shareholders and promised to offer a choice of cash or share options.

Oracle countered that this took away choice from PeopleSoft's shareholders, and has called for them to demand that PeopleSoft remove its "poison pill" provisions against hostile take-overs.

The number of lawsuits surrounding the proceedings is mounting. Oracle has said it plans to file suits against PeopleSoft and JD Edwards for trying to force through the deal without consulting investors. Both PeopleSoft and JD Edwards have outstanding suits filed against Oracle.