Oracle awaits antitrust word

Federal opposition could kill hostile bid
Written by Dawn Kawamoto, Contributor

Federal opposition could kill hostile bid

Oracle expects to receive word by Monday on whether federal antitrust regulators will let its hostile bid for PeopleSoft jump over regulatory hurdles. The US Department of Justice faces a Monday deadline, in which it either lets the deal progress or makes a second request for information as part of a formal investigation into the proposed buyout. For Oracle, antitrust opposition, as well as PeopleSoft's "poison pill" anti-takeover measures, could be a deal killer. "The DOJ will have no choice but to issue a second request for information if they feel (a takeover) raises competition issues," said Howard Morse, a former senior official with the Federal Trade Commission's high-tech antitrust division and now a partner with the law firm Drinker Biddle & Reath in Washington, D.C. If the DOJ issues a second notice for information, Oracle will need to gather up the requested information and respond. Oracle itself said in a statement issued late on Sunday that it expected the government would ask for more information on the deal - issuing the so-called second request. "We have not yet received a second request from the Department of Justice," the company said. "However, considering the high-profile nature of this transaction and the fact that the DOJ just received the case less than two weeks ago, we fully expect to receive a second request. Ultimately, though, Oracle said it believes it will win regulatory approval. "We remain very optimistic that DOJ will conclude that this transaction is not anti-competitive and that we will complete the transaction in a timely manner," Oracle said. Although Oracle would not face a deadline to submit the information, companies typically give regulators the information within several months, Morse said. But in cases where a hostile bid is involved, companies frequently provide the information within weeks of the DOJ request, he said. Moving quickly isn't always possible, however. Gary Reback, a prominent Silicon Valley attorney retained by PeopleSoft, said in a recent interview that if a second request takes place, it "is generally fairly voluminous. Weeks, if not months, are not uncommon for a reply." "If they file a second request that sort of stops everything until they get the documents they're asking for," Reback said. Antitrust attorneys said it is likely the DOJ will make a second request for information. "It doesn't take a rocket scientist to figure out that, if the state of Connecticut already filed an antitrust lawsuit, there is a good chance the DOJ will investigate," said one antitrust attorney who asked not to be named. The state of Connecticut announced its antitrust lawsuit against Oracle on 18 June. Other state attorneys general throughout the nation recently held a conference call to discuss whether they will follow Connecticut's lead. If the DOJ attempts to block Oracle's $6.2bn hostile cash bid for PeopleSoft, Oracle could challenge the DOJ's decision in court. Dawn Kawamoto writes for CNET News.com
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