PeopleSoft extends money-back guarantee

PeopleSoft will continue a controversial money-back guarantee program through March 31, or until Oracle drops its $7.3 billion bid for the company.

The Pleasanton, Calif., company disclosed the decision in a regulatory filing Tuesday. PeopleSoft began its Customer Assurance Program in June after Oracle first launched the surprise bid.

Under the plan, customers are entitled to two to five times the cost of the software license fees if PeopleSoft were acquired and the acquiring company discontinued its products.

PeopleSoft representatives have said the program has eased customers' fears about losing their investments in PeopleSoft's products and helped the company keep sales humming.

But Oracle, which could be liable for more than $800 million in payments were it to succeed in buying PeopleSoft, said the program is unfair to PeopleSoft shareholders. Oracle and a number of PeopleSoft shareholders are suing PeopleSoft and have asked the court to order the company to halt the program.

"This program has never been about customer assurance," an Oracle spokesman said Tuesday in a statement. "It has always been about entrenching the PeopleSoft management team."

Oracle is seeking regulatory approval of the deal, which would combine two dominant enterprise applications companies. Oracle expects a decision from the Justice Department in March and faces a proxy battle for control of PeopleSoft's board.

Oracle's tender offer, which it has extended six times, is set to expire Feb. 13.

PeopleSoft Chief Executive Craig Conway has declared the Oracle buyout saga over, but recent events suggest PeopleSoft is not yet out of the woods.

In addition to continuing the guarantee program, the company said Monday that it would repurchase $200 million of its own stock, bringing more shares under its control.