The federal law enforcement agency, which in Februaryon antitrust grounds, said it would not appeal . The judge ruled against a number of key arguments the Justice Department cited during the trial, ultimately allowing Oracle to proceed with pursuing its merger plans.
"We have decided not to appeal the district court's decision," said Hewitt Pate, assistant attorney general for the Justice
Board abruptly ousts CEO,
citing "lack of confidence."
Pate added that his agency realized the "ultimate outcome" rested on detailed factual findings that would receive "great deference" in the appellate courts.
Earlier Friday, PeopleSoft's board abruptlybecause of a "loss of confidence in Mr. Conway's ability to continue to lead the company." Analysts were quick to suggest that the ouster is a Oracle's offer.
But PeopleSoft gave no indication it was ready to throw in the towel.
"The board of directors will meet in due course to review the implications of today's announcement. PeopleSoft's board has carefully considered and unanimously rejected each of Oracle's offers, including its current offer of $21.00 per share," PeopleSoft said in a statement. "On May 25, the board concluded that the current offer was inadequate and did not reflect PeopleSoft's real value."
Is CEO switch good
news for Oracle?
In late-morning trading, PeopleSoft's stock was up 14.5 percent at $22.73 a share. That price exceeds Oracle's current bid, but falls short of the company's earlier offer of $26 a share.
Oracle faces other hurdles before it can acquire its rival. Those barriers include PeopleSoft's, which makes it cost prohibitive to buy PeopleSoft, and , the executive arm of the European Union. Oracle has been pursuing PeopleSoft for more than 15 months so far.
The court challenge over the poison pill will begin Monday in the Delaware Chancery Court. Industry watchers believe the European Commission case will not be resolved until late October, prior to the new slate of Commissioners coming on board.
"We are pleased that the Department of Justice has elected not to proceed with an appeal," Jeff Henley, Oracle's chairman, said in a statement. "This affirms our longstanding belief that the transaction is not anti-competitive. We are now looking forward to the trial in Delaware of our claims against the PeopleSoft board of directors for their actions over the past year which have seriously damaged, and continue to damage, shareholder value."
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on the Oracle-Justice Dept. trial.
In a ruling favoring Oracle, Judge Vaughn Walker of the U.S. District Court in Northern Californiathe government's argument that if Oracle swallowed PeopleSoft, the resulting giant business-software firm would have an anticompetitive dominance of the market.
Walker ruled that the Justice Department failed to make its case on a majority of the, attorneys who specialize in antitrust matters said. The judge said the Justice Department did not prove the market was defined by only three players--Oracle, PeopleSoft and Germany's SAP--in the enterprise software applications arena. He said the government did not show a market led by a combined Oracle-PeopleSoft and SAP would result in coordinated pricing and division of markets, and failed to demonstrate that the merger would limit competition for unique products by combing the closest substitutes, otherwise known as unilateral effects.
The Justice Department brought, who said they feared their selection of software applications vendors would drop from .
Oracle presented a case that, arguing that customers had more choices than the three software giants. The database and applications vendor also fought back with economic experts who challenged the government's stance that the deal would lead to higher prices for customers.