PeopleSoft board explains Oracle refusal

PeopleSoft has sent an open letter to its shareholders reaffirming its rejection of Oracle's offer to buy the firm for $6.3bn.

Last week senior Oracle executives criticised PeopleSoft's board for not meeting to discuss the terms of its offer, and said that major shareholders were now urging PeopleSoft to start negotiations.

In response PeopleSoft has written to its shareholders, saying that the deal is too risky for shareholders because it undervalues the firm.

It also claimed that the deal faces being blocked as anti-competitive, and that doubts remain over Oracle's commitment to the purchase.

"PeopleSoft has a better plan, one that provides superior value and greater certainty for stockholders," the letter states, referring to PeopleSoft's plans to buy JD Edwards.

At the Oracle AppsWorld conference in London last week, chief executive Larry Ellison claimed that he was bemused by the PeopleSoft board's refusal to meet with him.

"Craig Conway said he wouldn't sell at any price. This is something he doesn't even own. The shareholders will make the final decision, and we've gone to them," he said.

Having increased the offer to buy PeopleSoft, Oracle was convinced that shareholders would now force the board to talk, said Chuck Phillips, executive vice president at Oracle.

But Peoplesoft has no intention of meeting with Oracle. "There's really no need to meet," said Steve Swasey, spokesman at Peoplesoft.

"We've received all the information we need to make a considered decision."