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Oracle Corp. considered a variety of potential takeover targets, including BEA Systems Inc., Siebel Systems Inc. and J.D. Edwards & Co., before making its hostile tender offer for PeopleSoft Inc. last year, the software giant’s CEO Larry Ellison said in court testimony Monday. “[Siebel Systems Inc. chief executive] Tom Siebel came over to my house and tried to sell me Siebel Systems,” Ellison said in a videotaped deposition, adding that such a deal wouldn’t be one Oracle would likely pursue. “PeopleSoft and BEA are much more attractive … than Siebel.” Later in his testimony, however, Ellison characterized Siebel as Oracle’s “second choice” in the event a PeopleSoft acquisition did not occur. The deposition, recorded Jan. 20, was submitted by the Justice Department as part of its suit to block Oracle’s $7.7 billion bid for PeopleSoft. Oracle also had approached J.D. Edwards just prior to announcing its bid for PeopleSoft, Ellison said. Acquiring any of these targets would help the Redwood Shores, Calif.-based company build the scale necessary to compete against Microsoft Corp. and International Business Machines Corp., he added. But he described buying PeopleSoft as “the best acquisition that would enable us to compete most effectively” because of its strong engineering team and big customer base. The Justice Department also released an April 14, 2003, presentation made to the Oracle board outlining what it described as nine “M&A opportunities.” Included were: PeopleSoft; BEA; Sybase Inc.; Documentum Inc., which was acquired in December for $1.5 billion by EMC Corp.; Business Objects SA; J.D. Edwards, which was acquired by PeopleSoft last year; Lawson Software Inc.; Cerner Corp.; and SCT Corp. Siebel was not included in the presentation. Lawyers for Oracle attempted to block public release of the document but Judge Vaughn Walker late Monday ruled against the move. The document would only “fuel speculation in the marketplace” about Oracle’s M&A strategy, Oracle lawyer Daniel Wall said in explaining why the company sought to block its release. “It has zero value to the case.” The document described a PeopleSoft acquisition as one that would help Oracle compete more effectively against SAP AG and Siebel and would add 4,900 customers. Potential drawbacks to such a deal included the possibility of a “significant sales disruption for both companies,” and the fact that the company is in the midst of migrating customers to its latest software version, the document said. Earlier in the day, California Institute of Technology professor Preston McAfee testified on behalf of the government that the price of high-function software designed for large enterprises would rise as much as 30 percent should Oracle acquire PeopleSoft. Speaking to reporters after McAfee’s testimony, Wall described the professor’s testimony as “incredibly simplistic.” “The testimony was revealed to be a cartoon version of what this industry is about,” said Wall, a partner with Latham & Watkins. The trial is expected to wrap up near the end of this month. Copyright �2004 TDD, LLC. All rights reserved.

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