Federal regulators notified Oracle Monday that they will need more time to investigate its proposed hostile acquisition of PeopleSoft, a decision likely to further complicate the contentious takeover plan.
"We were not surprised, given the size and scope of the transaction and the fact that PeopleSoft is also proposing its own transaction, which is undergoing regulatory review," said Oracle spokesman Jim Finn, in a prepared statement. "We remain optimistic that the (U.S.) Department of Justice will conclude that this transaction is not anti-competitive, and that we will complete the transaction in a timely manner."
A statement from PeopleSoft also expressed little surprise at the move, and portrayed the delay as increasing the likelihood that regulators would rule Oracle's bid out of order. The company said it had consistently maintained that Oracle's bid faced substantial regulatory delays and a significant likelihood that it would be prohibited, and that Monday's announcement underscored this point.
PeopleSoft is in the midst of a planned buyout of J.D. Edwards & Co. The company recently sweetened the terms of that deal, in hopes of speeding its closing.
Since Oracle's June 6 announcement of its unsolicited offer to buy PeopleSoft, the two companies have been engaged in a heated clash of rhetoric and legal actions. Oracle's US$6.3 billion cash tender offer to PeopleSoft's shareholders expires July 7, but the company has said it will consider extending the offer.
(Additional reporting by Peter Sayer in San Francisco.)