The company's "customer assurance programme" is essentially a money-back guarantee that takes effect only if PeopleSoft is acquired. The programme, which PeopleSoft started in June, could trigger as much as $1.56bn (£0.84bn) in payouts to customers should the company be acquired. That liability potentially drives up the price of PeopleSoft, thus making it less attractive to potential suitors, including Oracle.
Oracle and some shareholders have criticised the programme as a management entrenchment tactic that erodes the company's value. PeopleSoft has defended the move as a deterrent to Oracle and its plan to buy PeopleSoft on the cheap and dismantle it.
As originally intended, the programme expired on Wednesday, coinciding with the close of PeopleSoft's first fiscal quarter, PeopleSoft spokesman Steve Swasey said. The programme's discontinuation also comes after the Justice Department filed suit to block Oracle's $9.4bn bid on the ground that the deal would be anticompetitive. The European Commission has signalled it may block the deal as well.
Oracle is in Brussels this week arguing its case before the European panel. The Redwood Shores, California, company is challenging the Justice Department suit as well, with the trial set to begin 7 June in San Francisco.
Despite the continuing fight, the lapse in the refund programme may indicate that PeopleSoft is dropping its guard. The firm may also be heeding the advice of two influential shareholder-advisory firms that recently called for an end to the programme.
However, the company's board of directors reserves the right reinstate the programme, Swasey said.
