Despite mutliple court contests between Oracle Corp. and
PeopleSoft, Inc., the University and its systems that are supported
by PeopleSoft software will remain unaffected, University officials
say.

In June 2003, Oracle proposed a takeover of PeopleSoft despite
management’s resistance, issuing a series of bids for the
company that PeopleSoft rejected wholesale.

Linda Green, spokeswoman for University Administrative
Information Services, said even if Oracle were to purchase
PeopleSoft — the firm that manages Wolverine Access and some
University records and payroll services — University
operations would not be affected.

“If Oracle is acquiring PeopleSoft, they will have
purchased the software as well as a customer base,” she
said.

The University switched to its new Wolverine Access system in
the winter term to honor its contract with PeopleSoft.

She added that currently the University has a good relationship
with Oracle and that she hopes that this continues even if
PeopleSoft is acquired.

Jennifer Glass, vice president of global external affairs for
Oracle, said Oracle would continue to support existing PeopleSoft
customers for 10 years before transferring them to Oracle
software.

The takeover process between the firms has caused much
commotion.

According to press releases from PeopleSoft, the company
rejected all of Oracle’s bids because they did not reflect
the true value of the company.

The transaction has also generated court battles: One ongoing
suit between the companies will decide whether PeopleSoft has
illegally made a takeover exceedingly costly for Oracle, and
another involving the government ended with a California district
court’s decision that Oracle’s takeover would not
violate antimonopoly laws.

Steve Swasey, spokesman for PeopleSoft, said Oracle’s
actions have damaged its business and his firm is seeking $1
billion in compensatory damages. The chance of a takeover caused
consumers to be wary of purchasing new software and thus affected
PeopleSoft’s business.

In a news release, PeopleSoft said Oracle’s overtures were
“a deliberate campaign to mislead PeopleSoft’s
customers and disrupt its business.”

Oracle says it is interested in acquiring PeopleSoft because the
combined company will be more innovative and will be able to
leverage technology to create better products.

With respect to the current court battle in Delaware, Oracle is
trying to repeal PeopleSoft’s “poison pill”
provision, which states that PeopleSoft customers may seek a refund
from the company after takeover.

Under the provision, customers can receive more money back than
they originally paid for PeopleSoft’s services.

The provision, which was implemented by PeopleSoft’s Board
of Directors, would make an acquisition very costly for Oracle,
potentially costing the company $2 billion.

University Law prof. Vikramaditya Khanna said that the use of
poison pill is common in hostile takeovers and Oracle will have a
tough time trying to get rid of this provision.

The judge can force the repeal of this poison pill provision
“if (he or she) feels that the Board has violated its
fiduciary responsibility,” Khanna said.

If the judge were to repeal this provision, Oracle would be able
to purchase PeopleSoft more easily.

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