Ellison: Oracle May Lower PeopleSoft Bid

But Ellison said Friday that "acquiring PeopleSoft is very, very important for Oracle's future."

The statement came in testimony at the trial of Oracle's lawsuit against PeopleSoft's corporate anti-takeover measures.

While there have been talks about raising the price, Ellison said, there have been "more discussions about lowering the price than raising the price."

Asked by Oracle attorney Michael Carroll why Oracle didn't just walk away from the takeover bid it launched in June 2003 due to PeopleSoft's furious resistance, Ellison responded in the present tense that the combination is "an important business move for us."

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On Thursday, Oracle once again extended its tender offer for PeopleSoft shares, which now stands at $21 a share, or $7.7 billion, and has been extended several times in the takeover battle.

Also Friday, Ellison testified that a "scare tactic" campaign PeopleSoft launched to counter the hostile takeover was a carefully calculated response by a weakened company.

Oracle had been eyeing a possible acquisition of its rival in the enterprise application software market for years before making its move in June 2003, Ellison said.

Oracle launched the takeover when it did, he said, because it was suspicious that PeopleSoft was trying to hide continuing business weakness behind a merger with J.D. Edwards.

Merger accounting can camouflage bad results for a time, Ellison said, and Oracle suspected that a weakened PeopleSoft announced the J.D. Edwards merger plan to help disguise troubles.

"We thought it might be an attempt to mask a bad quarter," he said.

Ellison spent his first hour and 45 minutes on the witness stand largely defending the good faith of Oracle's play for PeopleSoft, a proposal that the target's management characterized as a "hoax."

He insisted repeatedly that the proposed combination with PeopleSoft was not meant to leave customers out in the cold.

Under questioning from his own attorney, Ellison accused ousted PeopleSoft CEO Craig Conway of engaging in "scare tactics," deliberately misleading the company's customers to help PeopleSoft fight off Oracle's advances.

Oracle is trying to convince a Delaware Chancery Court to remove two antitakeover defenses that PeopleSoft has employed to stop Oracle's hostile bid. PeopleSoft is fighting to preserve them.

Redwood Shores, Calif.-based Oracle launched its bid for Pleasanton, Calif.-based PeopleSoft 16 months ago.

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