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Attorneys general weigh Oracle bid

Representatives of state attorneys general throughout the nation discuss Oracle's bid for PeopleSoft, a move that could lead to greater antitrust regulatory resistance against the deal.

Representatives of state attorneys general throughout the nation held a conference call Tuesday afternoon to discuss Oracle's hostile $6.3 billion cash bid for PeopleSoft, a move that could lead to greater antitrust regulatory resistance against the deal.

Massachusetts, California, Texas and dozens of other states participated in the discussions, with one participant on the call comparing the turnout to the initial turnout of state attorneys general in the lengthy and grueling Microsoft antitrust case. At the core of the debate is whether an Oracle-PeopleSoft merger would violate state and federal antitrust laws--an issue that was cited last week when the state of Connecticut announced it had filed an antitrust lawsuit to nix the deal.

"We received background information on the call. And what we took away was we needed to see what affect this deal would have on...our state agencies and quasi-government agencies like universities. We need to find out how many are using PeopleSoft, Oracle or SAP," said a state attorney general representative who participated in the conference call. "Our interest right now is protecting the state's (assets). We're not interested right now in private actions, since they'll be plenty of law firms who will be willing to address that."

State attorney general offices not only have the power to represent consumers on antitrust matters, but also act as the law firm to represent the state's interests in these issues as well, the source said.

But Oracle remains steadfast in its belief the merger will benefit customers.

"We're confident this acquisition would be a benefit to all existing PeopleSoft customers," said Jennifer Glass, an Oracle spokeswoman. "If state officials have any questions, we encourage them to contact us to discuss the issues particular to their state."

While the conference call attracted dozens of participants to discuss potential antitrust issues that could arise with an Oracle-PeopleSoft deal, several representatives from attorney general offices noted similar conference calls are frequently held when a major merger, or acquisition, is announced.

"Today's conference call is a first-round, routine call to discuss the concerns of the states. This is a standard, fact-finding process that typically happens anytime there is word of a proposed merger or takeover bid that affects states, or state government, as is the case in Texas. At this time, the Texas Attorney General's Office has not taken any legal action in this matter," Greg Abbott, Texas attorney general, said in a statement.

No future meeting date was set for the next round of discussions among the state attorneys general, said the source, who added: "We usually don't set a date for follow-up discussions. It's like a neighborhood gossip circle. Nothing is set in stone. If people have an issue, they begin to make calls to other antitrust agencies and it grows naturally."

A spokeswoman for the Massachusetts Attorney General's Office said the state's consumer antitrust protection agency is also reviewing Oracle's bid.

The takeover's hostile nature has some bearing on the state antitrust regulators wanting to move quickly on reviewing Oracle's buyout offer, the source said.

On the federal antitrust regulatory front, the U.S. Department of Justice has until Monday to notify Oracle whether it will make a second request for information on its hostile bid.

One antitrust lawyer noted there is a "very good chance" the Justice Department will make that request, given the state of Connecticut has already filed an antitrust lawsuit. The lawyer also noted that most companies involved in a hostile bid will throw all resources at answering the Justice Department's questions within weeks of receiving the second request notice.

Glass, however, said Oracle will have to wait to see what the request entails before she can comment on how long the process may take.