PeopleSoft files suit against Oracle

The acrimonious battle between Oracle and PeopleSoft has taken another turn, with PeopleSoft filing a lawsuit claiming that Oracle's $5.1bn bid is an attempt to stop it from closing new sales.

PeopleSoft has reacted furiously to Oracle's bid for the company, as the database giant plans to discontinue PeopleSoft product development and will try to persuade PeopleSoft customers to upgrade to Oracle applications.

PeopleSoft alleges that this amounts to unfair business practices, trade libel and tortuous interference with its customer relationships.

"By making an offer with the acknowledged intent of eliminating PeopleSoft's business, Oracle seeks to disrupt PeopleSoft's efforts to complete new sales, thus effectively damaging PeopleSoft's business even if Oracle never buys a single share of PeopleSoft stock," said Craig Conway, PeopleSoft president (pictured).

But Oracle spokesman Jim Finn reacted: "PeopleSoft seems to have revived its on-again, off-again litigation strategy. This matter must be decided by PeopleSoft shareholders and not by frivolous litigation."

Last week, the PeopleSoft board rejected Oracle's offer to buy the company, and urged shareholders to follow suit. The company confirmed its intention to press forward with its acquisition of mid-market business software maker JD Edwards.

JD Edwards is also taking legal action against Oracle and two of Oracle's senior executives.

The vendor is suing Oracle for $1.7bn, claiming that its "arrogant and unlawful" actions are designed to scupper the JD Edwards deal with PeopleSoft and are destroying shareholder value.

Oracle's Finn replied: "Allegations raised in the JD Edwards lawsuit are nothing more than a smokescreen.

"This is a tactic designed solely to distract PeopleSoft shareholders from making a choice while the PeopleSoft management remains intent on keeping hefty pay packages and neglecting the best interests of shareholders."