Peoplesoft's board of directors has unanimously rejected Oracle's revised offer of $9.4bn -$26 a share -on the astonishing grounds that it's not enough money. But don't take Peoplesoft's word for it: this too is the considered opinion of its gold-plated advisors, Citibank and Goldman Sachs.

The Peoplesoft board is on surer ground when it notes the likelihood of antitrust action in both the US and the EU which would scupper any takeover. But we shouldn't have too long to wait in the case of the US: Oracle says it expects a ruling from the Department of Justice before March 12.

Today's Peoplesoft board vote can be seen as a paean to altruism on the part of CEO Craig Conway, who will trouser a whopping $62 million in severance pay, options and stock if Oracle wins the day. But is Peoplesoft's attempt to play the anti-trust card really in the interest of its shareholders?

Oracle's offer on the table represents a premium of $4 a share on Peoplesoft's closing price on February 3, the day before it made its latest offer. It is difficult to see how Peoplesoft shareholders can resist. It's a different story for Oracle shareholders. Oracle currently has approx. $8bn in the bank - while Peoplesoft has $1.5bn. Oracle will, as some analysts have pointed out, have a net sum of just $100m (cash minus bank debt), following a successful takeover. Not much for the inevitable lay-offs.

Both businesses are cash-generative, but Oracle would really need to make the assets sweat to restore such a huge financial cushion. ®

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