'Expect surprises' Oracle tells PeopleSoft

Oracle has promised that it has "a few tricks up its sleeves" if its increasingly bitter battle to take over rival PeopleSoft wins regulatory approval.

The database giant intends to launch a proxy fight at PeopleSoft's shareholder meeting in spring 2004, if it clears the regulatory hurdles.

Before it can show its hand, Oracle must wait for the US Department of Justice (DoJ) to rule whether its proposed acquisition would raise any anti-trust issues. A decision is expected some time this autumn.

European regulators are also poring over the details of the bid, and are expected to rule within a similar time frame.

Oracle hopes to parachute executives more favourable to the deal onto PeopleSoft's management board, while removing some of those that currently oppose the transaction.

"At the proxy fight, we're going to have a few things up our sleeves," said Chuck Phillips, executive vice president at Oracle.

Speaking at a news conference at the OracleWorld user conference, Phillips claimed that the DoJ and the European Commission are PeopleSoft's best hope of fending off the deal.

But he said that Oracle is confident that the authorities would give their approval.

According to Phillips, a successful acquisition would benefit customers. The deal would build a company capable of competing against SAP and Microsoft, he added.

Where Oracle might face challenges is how the acquisition would impact those PeopleSoft customers that do not currently use Oracle's database products.

"There's no requirement to switch to Oracle database. That's not in the plans," said Phillips.

Both the DoJ and the European Commission approved the merger between HP and Compaq, and Oracle is hoping that this will serve as a precedent in allowing consolidation in the technology sector.

In its defence, PeopleSoft has managed to increase sales after introducing customer guarantees that offer a big pay out in the event of a takeover.

So while PeopleSoft president and chief executive Craig Conway has described the battle as "over", further skirmishes look set for the autumn, and again early next year.