PeopleSoft builds up anti-Oracle defences

PeopleSoft has extended its money-back guarantee to customers and bought back $200m worth of shares in a further attempt to frustrate Oracle's $7.3bn hostile bid for the company.

PeopleSoft is extending its money-back scheme for customers' software licence fees until 31 March, or until Oracle drops its acquisition attempt.

The scheme - which if put into operation could cost any company that bought PeopleSoft $800m - will reimburse customers with between two and five times the original cost of their licences if it is acquired and its products discontinued.

On Monday PeopleSoft's board also authorised a common stock repurchase programme up to a maximum value of $200m.

David Bradshaw, principle analyst at Ovum, said: "This effectively reduces the amount of common stock PeopleSoft has outstanding, although it is not a particularly large chunk. It may increase the raw value of its stock.

"In theory, this helps keep existing shareholders happy, but may also flush out Oracle by making them raise their price. But it would only do this by about two per cent or so."

PeopleSoft also filed a request for evidence with the Alameda County Court in California last week, asking to interview Oracle executives and review emails pertaining to PeopleSoft's unfair business practices lawsuit against the database giant.

PeopleSoft spokesman Steve Swasey said that the legal move was "just another step in an ongoing process to defend our claim that Oracle's actions have attempted to harm our business".

The actions follow Oracle's decision on 5 January to extend the credit line funding its bid.

An Oracle spokesman criticised the extension of PeopleSoft's refund scheme in a statement. "This programme has never been about customer assurance. It has always been about entrenching the PeopleSoft management team," he said.

Meanwhile, the European Commission has suspended indefinitely its antitrust investigations into Oracle's bid to allow the company time to provide additional information.

Up to this point the Commission's ruling was expected at the end of March, the same time as similar investigations by the US Department of Justice were due to be completed.

As a result, Oracle is likely to have to extend its bid for a seventh time as its current tender offer will expire on 13 February.