Hostile Takeovers Microsoft V. Oracle

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PeopleSoft v. Oracle: Hostilities Involved in a Takeover Precious Richey OMM 640 Business Ethics and Social Responsibility (MFF1226A) Instructor – Ken Edick Submitted: 7/23/2012 Abstract The hostile takeover of PeopleSoft by Oracle was the results of a lengthy court battle that raised many issues. One issue in particular concerned anti-trust laws and their application to technology companies. The Department of Justice, in an attempt to block the takeover, argued that a merger of this nature would lessen competition and ultimately limit customer choice. An appellant court judge ruled that this case did not meet the criterion of an anti-trust breach and ruled in favor of Oracle. Never the less, many other factors…show more content…
The hostile takeover bid came on the heels of PeopleSoft’s announcement to purchase another software company, J. D. Edwards. The planning of Oracle’s announcement was seen as an attempt to undermine this transaction (Lohr, & Flynn, 2004). The executives of PeopleSoft also argued that the merger should not be allowed because of anti-trust laws. The Department of Justice took up PeopleSoft’s claims and filed suit to block the merger on the anti-trust argument that this merger would “end fierce head-to-head competition that has brought customers lower prices and better products” (Lohr, & Flynn, 2004, par. 10). Another reason the PeopleSoft’s executives rejected Oracle’s takeover bid was the risk that Oracle would discontinue PeopleSoft’s products which would damage the company, stockholder value, employees and current customers. It was speculated that the takeover would cause the dislocation of 8,000 PeopleSoft employees (Kirby, 2003). The cause of the concern was Oracle’s stated position that it was only interested in PeopleSoft’s lucrative customer base and had no interest in supporting the company’s products (Lamonica, 2004). A final reason for the takeover rejection by PeopleSoft executives related to the position that Oracle’s initial bids undervalued the company based on financial performance and market position
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