Rogue PeopleSoft shareholders turn on company
Published: 18 Aug 2003 09:40 BST
A handful of PeopleSoft shareholders have filed class-action lawsuits claiming that the enterprise software maker's executives should not have shunned Oracle's hostile takeover bid.
Eight PeopleSoft shareholders are currently pursuing separate class-action litigation against the company, according to its latest quarterly report to the US Securities and Exchange Commission. The report details the better-than-expected earnings PeopleSoft first reported last month.
According to the SEC filing, the eight individuals filed putative stockholder class-action suits in the Delaware Chancery Court against PeopleSoft and several of its officers and directors. The suits allege that the PeopleSoft executives breached their fiduciary duties in connection with their response to Oracle's tender offer to purchase the software maker.
The plaintiffs in each of the actions are seeking "injunctive relief and an accounting," according to the SEC filing.
Until now, PeopleSoft investors have spurned the Oracle takeover for the most part. Last week, PeopleSoft reported that only an estimated 37.7 million shares, or roughly 10 percent of the company's outstanding shares, had been tendered in favour of the offer.
At that time, Oracle extended its deadline for tendering shares in its hostile bid for PeopleSoft to 19 September. The move was largely anticipated, since federal antitrust regulators have yet to issue a decision on whether to challenge Oracle's buyout bid.
On Thursday, PeopleSoft amended its own lawsuit against Oracle, which claims that the company's acquisition bid was designed to disrupt PeopleSoft's business. PeopleSoft expanded the suit to include "extensive new facts about Oracle management's ongoing acts of unfair trade practices, including its efforts to disrupt PeopleSoft's customer relationships."
PeopleSoft filed the initial complaint in California Superior Court in Alameda County on 13 June, a week after Oracle launched its hostile buyout plan.
The amended suit alleges that Oracle deliberately tried to mislead PeopleSoft customers about its plans to support PeopleSoft products. The suit also claims that Oracle interfered with customers of J.D. Edwards, who are soon to become PeopleSoft customers though a recent acquisition.
CNET News.com's Alorie Gilbert contributed to this report.
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