Oracle has cut almost $2bn from the value of its bid for software rival PeopleSoft.
The database giant has reduced its offer to $21 per share, or $7.7bn, from its previous offer of $26 per share, or $9.4bn.
Oracle chairman and chief finance officer Jeff Henley said in a statement: "Our revised offer reflects changes in market conditions and in PeopleSoft's market valuation."
But Henley claimed that the new offer represents a premium of 21 per cent over PeopleSoft's closing price on 14 May of $17.30.
"That's a higher premium than our previous offer was on the date made, calculated on both a single-day and 30-day moving average basis. I believe this deal will benefit stockholders of both companies," he said.
Oracle also announced that it has extended its previously announced tender offer for all of the common stock of PeopleSoft to midnight on 16 July 2004. The offer was previously set to expire at midnight on June 25 2004.
The company said that, as of the close of business on May 14 2004, a total of 7,906,545 shares had been tendered in and not withdrawn from the offer.
PeopleSoft confirmed that its board has reviewed Oracle's "unsolicited offer" three times, and had concluded on each occasion that it undervalued PeopleSoft.
It still recommends stockholders to reject Oracle's offer and not tender their shares.
PeopleSoft said in a statement: "Given the significant antitrust obstacles in both the US and Europe, we do not believe Oracle's bid can be completed at any price.
"Consistent with its fiduciary responsibility, the board will evaluate the reduced offer at a regularly scheduled board meeting later this month."
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