PeopleSoft extends customer refund plan

NEWS PeopleSoft has restarted a customer refund programme that is designed to counter the negative effects of Oracle’s ongoing hostile buyout bid on its sales. PeopleSoft introduced the money-back guarantee last quarter, after Oracle launched its tender offer on 6 June, sparking the most closely watched merger battle in the computer industry since Hewlett-Packard acquired Compaq. Under the programme, PeopleSoft customers that purchase new software would be owed a refund of two to five times the cost of their software license fees if PeopleSoft is acquired and the acquiring company stops selling its products. The original refund program expired 30 June. This quarter, which ends 30 September, the offer will include customers of both PeopleSoft and JD Edwards, a rival company PeopleSoft recently bought. If Oracle or another company acquires PeopleSoft, the acquiring company would be legally obligated to make hundreds of millions of dollars in refund payments should it trigger the preconditions. Oracle has said previously that it would not market and actively sell PeopleSoft products if its $7.25bn tender offer, which expires on 19 September, is accepted. PeopleSoft spokesman Steve Swasey said: "It's like an insurance programme." PeopleSoft said a number of customers took the company up on the refund programme during the quarter ended 30 June, though it won’t disclose exactly how many. Overall, PeopleSoft posted strong results, signing more than 100 new deals during that quarter, up from 72 in the same quarter the year before, Swasey said. Maintaining healthy sales is a critical part of PeopleSoft’s strategy to fend off Oracle’s bid. If sales slip, investors could lose confidence in the company and send its stock down, increasing pressure on shareholders to tender their shares to Oracle, which is offering $19.50 per PeopleSoft share. PeopleSoft’s stock closed at $17.30 per share on Tuesday. The refund programme - along with a lawsuit, a "poison pill" and antitrust allegations - is one of the many tactics PeopleSoft has used to dig in its heels against Oracle. In the meantime, PeopleSoft folded in JD Edwards as a wholly owned subsidiary last month. It expects to complete the merger by the end of the week by acquiring the remaining 12 per cent of outstanding JD Edwards shares. At that point, PeopleSoft will retire the JD Edwards name and ticker symbol, Swasey said. PeopleSoft plans to further discuss its JD Edwards integration plan on 4 September in New York. Alorie Gilbert writes for CNET News.com