Oracle sweetened its hostile cash bid for PeopleSoft by 22 per cent today, to about $6.3 billion, the latest escalation of a vitriolic acquisition battle.
The new, surprise bid at $19.50 a share compares to the original offer of $5.1 billion, or $16 per share, which PeopleSoft rejected.
PeopleSoft had been preparing a friendly merger with smaller rival JD Edwards before Oracle launched its offer.
The merger with JD Edwards merger would let PeopleSoft surpass Oracle in the market for such business applications as accounting, purchasing and human resources. Oracle said it will file a lawsuit in Delaware today to rescind that merger.
Mr Eugene Walton, an independent software analyst who runs Walton Holdings, said Oracle's new bid looks "too high."
"Ellison (Oracle CEO Larry Ellison) raised the bid because everybody, including all the analysts, said he had to," said Mr Walton, who values PeopleSoft at $16.75 per share. "But I haven't seen anything in print that looks at what PeopleSoft is really worth and the assumptions behind it."
Mr Ellison said that contrary to the contentions of PeopleSoft management, Oracle intends to "fully support PeopleSoft customers and products" for many years to come.
"I don't think he's that serious," said Walton. "When the first thing you say is, 'We're going to close you down,' it's just not going to go over well with customers."
Germany's SAP leads the business applications market. Oracle is a bigger software maker, second only to Microsoft, thanks to market-leading database software that holds and manages such data as customer information and addresses.