KUHN CAPITAL Friday, December 15, 2017
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Oracle Nearing Rope's End?

November 12

After commenting on the quieting of the Oracle and Peoplesoft war drums in last month's Roundup, now we hear that Oracle may be stymied by some clever Peoplesoft licensing refund manuevers.

PeopleSoft is offering its customers up to $800 million in refunds if Oracle succeeds in its $7+ billion hostile purchase, a sort of user-based poison pill. Credit creative investment bankers for this novel defense.

For its part, Oracle is demanding in court papers that Peoplesoft halt its "Customer Assurance Program''. More than just getting your money back, the deal promises Peoplesoft customers refunds of up to five times their current licensing fees if the company is acquired by a competitor that doesnít support its products. Maybe we should get a couple of licenses.

Adding to Oracle's woes, a spokesman recently admitted that an antitrust review of the company's takeover bid might not be completed until sometime in January, rather than before the year's end as promised to investors.

While amused by the spectacle, we're also increasingly wondering if all these turns and twists benefit the shareholders of either company. On the other hand, we're pretty certain the prolonged battle benefits the assembled armies of lawyers and investment bankers, and the egos of the involved executives.


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