Oracle believes that it can still carry the day, but its battle to acquire PeopleSoft is getting tougher as time goes on.
With regulators taking longer than expected to make a decision, government trustbusters are reportedly building a case to challenge the deal. Meanwhile, PeopleSoft stock is soaring on investor enthusiasm for its merger with J.D. Edwards. All the while, the company's shares continue to hover stubbornly above Oracle's offer price.
On top of everything, PeopleSoft recently revised a money-back guarantee programme that could cost Oracle a bundle, should its acquisition bid succeed.
Oracle has called the rebate programme a potential deal-breaker. Here's why: if PeopleSoft gets acquired, customers would receive as much as five times the original purchase price of their software, if product support got reduced within four years.
But Oracle maintains that its resolve remains as strong as ever. This week, the company joined a group of PeopleSoft shareholders seeking an injunction against the programme.
Executive vice president Chuck Phillips, a highly regarded Wall Street analyst who has since become acquisition consigliore to Oracle CEO Larry Ellison, spoke with CNET News.com about the next steps in this continuing software saga.
Q: What are the odds that this deal will happen -- and in what time frame?
A: Based on what we're hearing now, we are waiting for the Department of Justice. It seems like a December or January event. Lots of customers agree with us. That's the only thing we can rely on. We think we've made a pretty strong case, and the facts support us pretty well. We think the odds are in our favour.
There have been reports that the Justice Department will oppose your bid for PeopleSoft. What's your latest understanding of the government's likely position?
The process is still under way. There are a very small number of people involved in this process, so anyone writing on rumours can't have access to direct information. It's understandable that people are going to speculate.
In terms of the process we're involved in, there is still a lot of work to be done and information we have to get them. It's a complex industry and a complex process.
