Oracle frustrated by regulators

Software giant Oracle has admitted that it will take longer than originally thought for regulators on both sides of the Atlantic to decide whether to give the green light to its proposed takeover of rival PeopleSoft.

When launching its bid in June this year, Oracle had hoped to get regulatory approval by this autumn.

But speaking at the OracleWorld conference in Paris today, Chuck Phillips, the man leading Oracle's hostile bid for PeopleSoft, conceded that a decision was unlikely to be reached before the end of November.

The delay is likely to frustrate Oracle. While competition authorities are deciding whether to allow the bid, PeopleSoft has completed its transaction for JD Edwards and seen its share price outstrip Oracle's bid price.

But Oracle remains adamant that it is committed to making the acquisition.

"Contrary to what you may have heard, the transaction is not dead: that's just wishful thinking. Regulatory approval is the key," said Phillips.

Opponents of the deal, including PeopleSoft itself, maintain that Oracle's bid would be bad for customers, affecting current PeopleSoft implementations and reducing choice for replacement systems.

Only yesterday, PeopleSoft's chief executive, Craig Conway, told delegates at the PeopleSoft Connect conference in Barcelona: "Oracle's actions - discontinuing its sales of our products and laying off its PeopleSoft staff - are not consistent with wanting to own PeopleSoft.

"These tactics are consistent with wanting to discredit us because Oracle sees us as a threat."

But Oracle is locked in talks with both the US Department of Justice and the European Commission, to convince authorities to allow its bid.

"The deal is actually good for customers. It provides strong competition against the market leader [SAP]," said Phillips.

"And by taking money out of marketing PeopleSoft products, we can focus on supporting those customers for years to come."

Even if Oracle gets approval from regulators, it still faces significant challenges to acquiring PeopleSoft. PeopleSoft's board is firmly against the deal and has ratified poison pill provisions, including issuing more shares to make hostile bids more difficult.

But Phillips maintained: "The only obstacle we see is regulatory approval. The others, we know a way around."

He also predicted that PeopleSoft would struggle to maintain its recent impressive financial performance.

Additional reporting by Miya Knights.