PeopleSoft extends customer refund program
Summary
Still fighting off Oracle, the wolf at its gates, PeopleSoft renews a customer assurance program that could cost any acquiring firm more than $1 billion.
Topics
PeopleSoft has renewed its controversial customer assurance program through June 30, as it continues to fight off a hostile tender offer by Oracle, according to a filing with the Securities and Exchange Commission on Tuesday. Under the program, PeopleSoft customers will receive a refund of up to five times their software license fees if the company is acquired and the new buyer fails to continue offering product support for a designated time period after the contract is signed.
When PeopleSoft started the program last June, it described it as a means to reassure customers they would continued to receive support if the company were acquired. The program could trigger more than $1.56 billion in payments for any acquirer who does not offer continued product support. Investors and Oracle claim the program also acts as a deterrent for any potential acquirer, because it can possibly drive up the cost to acquire PeopleSoft.
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