Recently unsealed internal e-mails from Oracle executives outline the company's strategy and thoughts in its effort to acquire PeopleSoft in a hostile takeover, PeopleSoft said Tuesday.
The release of Oracle's documents and internal e-mails--two from high-ranking Oracle executives--on Monday mark the latest turn of events in the escalating fight between the two software applications companies over Oracle's hostile takeover bid. PeopleSoft filed a lawsuit in California's Alameda County Superior Court in June, alleging that Oracle was attempting to disrupt its business with its takeover bid. A hearing on PeopleSoft's expanded lawsuit is set for Sept. 4.
In the lawsuit, several e-mails from Oracle executives have been made public, and PeopleSoft has cited them as an illustration of Oracle's alleged desire to disrupt PeopleSoft's business and acquire its competitor for a "cheap" price.
One of the issues causing great concern among PeopleSoft customers is Oracle's plans for supporting and upgrading PeopleSoft software, should a merger occur.
In its lawsuit, PeopleSoft noted that although Oracle executives had indicated that PeopleSoft products would be placed in "maintenance mode," Safra Catz, a high-level Oracle vice president, said in an internal e-mail, "We really won't be continuing their product line."
Oracle, however, said that the comments in the internal Oracle e-mails were taken out of context and that the company had never wanted the documents sealed in the first place. Oracle late last week asked the court to unseal the documents, a company representative said.
"The important thing to remember is that Oracle opposed PeopleSoft's motion to seal portions of the amended complaint because Oracle has nothing to hide," Oracle spokesman Jim Finn said in a statement Tuesday.
Finn further added that the "e-mail from...Catz focuses on the 'exciting opportunity' for Oracle and the positive impact of the proposed transaction to Oracle's earnings per share. It does not talk about harm to PeopleSoft. The referenced comment about not continuing PeopleSoft's product line does not, when in proper context, suggest that Oracle has misrepresented anything about what it intends to do, and is in fact followed by talking points that make it clear that Oracle intends to continue and improve product support and to make product improvements."
PeopleSoft, meanwhile, refers to Oracle's support of its own products as a sign of what PeopleSoft customers could expect in a merger. Citing an internal e-mail from Finn, PeopleSoft's lawsuit states: "Finn, in an internal email, (said) announcing Oracle's decision to cease support of its own older product 'would be the wrong signal to customers and would be seized upon by PSFT and their advisors to counter (Oracle CEO) Larry (Ellison)'s assertions that PSFT customers can take their time upgrading to ORCL."
Another concern among PeopleSoft customers has been over the migration path to Oracle applications, if the merger occurs.
While Oracle has said it hopes to create an easy and graceful migration to its software, PeopleSoft said its customers should expect the opposite. PeopleSoft, in its lawsuit, cited an internal e-mail from a top Oracle executive, Chuck Phillips, to a PeopleSoft customer: "You are correct that migrating between releases is never cost free and consulting is involved. We never said otherwise and that's a fact of life as anyone remotely familiar with software knows."
In its lawsuit, PeopleSoft alleges Oracle wanted to hurt its business in order to keep its offer price low. Oracle initially offered $16 a share to PeopleSoft shareholders, but has since raised it to $19.50.
Oracle analyst relations specialist Peggy O'Neill quoted Phillips in an internal document as having said: "Time is on our side, because the more time goes on, the less likely another suitor emerges, the more likely people start worrying about what will happen to the future of PSFT...the more something hurts PSFT, the more likely that share price drops and $16 starts looking better."