CEO Craig Conway’s over-enthusiastic statements about the effect Oracle Corp’s hostile takeover bid was having on PeopleSoft Inc’s business contributed in part to his downfall, it was suggested in court yesterday.
PeopleSoft fired Conway on Friday, at a time when the PeopleSoft-Oracle takeover battle is in a critical phase, unencumbered by antitrust litigation with the US government, and yesterday a company director said Conway had misspoken to investors.
PeopleSoft director Steven Goldby, questioned by Oracle’s attorneys at the first day of the Oracle-PeopleSoft trial in Delaware yesterday, reportedly said that the board was concerned with Conway’s remarks during a September 2003 analysts’ day.
We knew that Conway had misspoken and what he had said was untrue, Goldby reportedly testified. The court was reportedly shown a video deposition of Conway saying the remarks represented his hoping for a self-fulfilling prophecy.
Goldby reportedly testified that Conway’s allegedly misleading statements contributed in part to the board’s decision to let him go last week. Conway, who remains for the moment a PeopleSoft director, is set to testify Wednesday.
Conway’s remarks, which evidently downplayed the effect Oracle’s bid had on PeopleSoft’s sales, are not available. PeopleSoft, 1984-style, corrected the transcript of the meeting in regulatory filings to reflect the intended meaning of the speaker.
Conway, in his corrected form, had said in part: Oracle’s tactics have created concern among many users, and that’s a problem for us. Fortunately, we’ve been able to overcome much of it and we expect that we will continue to be able to do so.
The Delaware case sees Oracle trying to overcome another hurdle in its long-running campaign to absorb its rival. The company wants the court to overturn PeopleSoft’s shareholder rights plan, a poison pill measure that makes hostile takeovers difficult.
Goldby reportedly testified that Conway’s remarks were not the only reason for his dismissal, but did not elaborate. On Friday, the company had cited a lack of confidence in his ability to lead the company.
PeopleSoft rejected the suggestion the US Department of Justice’s decision not to pursue its antitrust lawsuit against Oracle in appeal may have contributed to the decision. Conway and the PeopleSoft board had cited antitrust concerns as the main barrier to the merger.
Other theories put forth include the recent $1bn broad five-year technology integration deal with IBM that PeopleSoft recently signed. Such a deal would likely be extremely unpalatable to Oracle.