The board also argued against any such deal, saying it would likely be rejected by antitrust regulators.
"The board concluded that the reduced offer is inadequate and does not reflect PeopleSoft's real value," the company said in a statement Wednesday. PeopleSoft also said that Citigroup Global Markets and Goldman Sachs found that as of Tuesday, the Oracle offer is "inadequate, from a financial point of view."
Earlier this month, Oracle lowered its bid to US$21 per share, saying the new price reflects changes in market conditions. That price values the company at around US$7.7 billion.
Oracle had initially offered US$16 per share for PeopleSoft and twice raised its offer, first to US$19.50 per share and then to US$26 per share.
The hostile takeover attempt has been challenged by US regulators, who assert that the combination of Oracle and PeopleSoft would hurt competition in the market for software sold to large businesses. The Department of Justice has filed suit to block the deal; Oracle has said it plans to contest the legal action.
Oracle executives said they had no comment.
Also Wednesday, PeopleSoft announced that it has settled shareholder lawsuits over the company's "customer assurance program." Under the program, customers are entitled to a sum of up to five times the cost of their software license fees if PeopleSoft is acquired and the acquiring company discontinues its products.
Critics have argued that the program lowers PeopleSoft's value. The company let the program expire in April, but then renewed it through June 30.
Under the settlement, if the customer assurance program is extended past June 30, it will apply only to actions by Oracle.
The settlement also states that when it comes to deciding whether to award money to shareholders, any questions that arise during the next two years will be resolved by PeopleSoft's independent directors, as opposed to company officials who sit on the board. It also requires PeopleSoft to amend its bylaws to allow stockholder nominations for membership on the board of directors until 95 days before the anniversary of the previous year's annual meeting.
"This settlement puts the stockholder litigation behind us. We are pleased that the stockholder plaintiffs recognise the legitimacy of the customer assurance program," PeopleSoft said in a statement. "We believe the program assures customers of the soundness of their investment in PeopleSoft products and (assures) stockholders that the value of their investment is protected."
