PeopleSoft Questions Oracle’s Intentions

Oracle Corp. internal e-mails show executives knew that their hostile bid for PeopleSoft Inc. would hurt sales of PeopleSoft’s business applications software, according to court documents.

Oracle executives also urged analysts to advise clients to delay software purchases after the database giant revealed its $16-a-share tender offer in June, according to the e-mails.

“The more something hurts [PeopleSoft], the more likely that share price drops and $16 starts to look better,� an unidentified Oracle executive said in an e-mail, according to an amended lawsuit filed by PeopleSoft on Aug. 12.

Oracle later raised its offer to $19.50 a share.

The tender offer is set to expire Sept. 19.

Oracle, based in Redwood City, Calif., is trying to buy PeopleSoft for $7.25 billion to regain its second-place spot in the market for software to manage accounting, track inventory and process payroll.

PeopleSoft, which had been third in that market, jumped ahead of Oracle by buying J.D. Edwards & Co. last month for $1.8 billion.

Oracle spokesman Jim Finn said PeopleSoft’s complaint was “rife with comments taken out of context as PeopleSoft continues to litigate the issue in the court of public opinion.�

Meanwhile, PeopleSoft extended a rebate program that promises customers cash back if Oracle succeeds with its takeover and stops developing the software.

The rebates helped Pleasanton, Calif.-based PeopleSoft top its second-quarter forecasts by easing customer fears about the future of their software investments, the company said.

“We decided to do it again because this thing’s dragging on,� PeopleSoft spokesman Steve Swasey said.

In Nasdaq trading Tuesday, PeopleSoft shares rose 30 cents to $17.30 and Oracle shares gained 7 cents to $12.44.