PeopleSoft suspends customer guarantee scheme
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PeopleSoft, still the subject of a hostile takeover bid from Oracle, has suspended a controversial compensation programme for new customers.
2 April 2004 PeopleSoft, the enterprise applications company that is the subject of a hostile takeover bid from rival Oracle, has suspended a controversial compensation programme for new customers.
The software company confirmed that it had called a halt to the 'customer assurance programme' on 31 March 2004, at the end of its last quarter. But it said it reserved the right to re-launch the initiative in the future.
The initiative has been seen as a 'poison pill' tactic to fend off Oracle's hostile $9.4 billion bid.
Under the initiative, which was launched in June 2003, software licence agreements have contained clauses that guarantee customers big compensation payouts if PeopleSoft is acquired and its products de-supported within a certain timeframe.
The value of those guarantees is believed to have topped $1.5 billion.
But some of PeopleSoft's shareholders have spoken out against the programme, saying it was not in their best interests.
Meanwhile, PeopleSoft and Oracle have been giving evidence this week to the European Commission's ongoing inquiry into the proposed merger. A ruling on whether a merger breaches Europe's anti-monopoly rules is expected before 11 May.
Competition authorities in the US have already sought to block the deal, although Oracle has said it is prepared to challenge that judgement in the courts.
