The letter, written by PeopleSoft's board of directors, said that investors would be better off under the company's current strategy, including its bid to acquire J.D. Edwards. Oracle has set a deadline of July 7 by which PeopleSoft shareholders must tender their shares.
"The merger of J.D. Edwards and PeopleSoft is a strong and financially compelling business combination," the board wrote. "In contrast, we believe the tender offer Oracle has made poses extraordinary risks and is destructive to stockholder value."
Oracle last month surprised the software industry when it made a $5.1 billion hostile takeover bid for PeopleSoft, just days after PeopleSoft itself had announced plans to acquire J.D. Edwards for $1.7 billion. Oracle has since upped its offer to $6.3 billion and. PeopleSoft and Oracle compete in the market for broad-based business applications, an area in which Oracle has had little success building on its commanding lead in database software.
Oracle's bid has since come underby some state attorneys general, who have complained that their constituents would face less competition and higher prices if the deal were to be approved. The the Oracle offer.
The PeopleSoft board laid out the risks it said were inherent in a potential merger with Oracle. One risk, the board wrote, is the possibility of delays lasting several months as regulatory bodies review the proposed deal for antitrust implications. At the end of the review period, the transaction could well be blocked as anticompetitive, the board wrote.
The board also revived the specter that Oracle might not fully support and enhance PeopleSoft's products after the merger, creating "serious uncertainty" for its customers. With such uncertainty, potential customers, as well as those seeking to upgrade, would shy away from committing to PeopleSoft products, the board said.
The board also restated its.
Oracle could not immediately be reached for comment.