Lawson Software Inc. was in talks about a possible takeover by Oracle Corp. in 2002 but has no interest now in such a merger, an executive testified on Monday in the antitrust trial over Oracle's hostile takeover bid for rival PeopleSoft Inc.
Lawson Chief Executive Jay Coughlan said that if U.S. officials succeed in stopping Oracle's $7.7 billion hostile takeover bid for rival PeopleSoft, his company would not be interested in restarting the acquisition talks.
The Department of Justice wants to block a combined Oracle/PeopleSoft on grounds it would cut customer choice and drive up prices in the software market catering to large enterprises.
"No," answered Coughlan when asked by lead U.S. Department of Justice attorney Claude Scott whether Lawson remained interested in merger talks with Oracle.
Oracle, which filed a motion on Friday with U.S. District Judge Walker to dismiss the government's lawsuit, also said it would not call PeopleSoft Chief Executive Craig Conway, a former Oracle executive, to testify.
Oracle's lead attorney Dan Wall said the company had reversed its decision to call Conway because earlier witnesses had covered the same ground.
But Wall said he still plans on calling Oracle Chief Executive Larry Ellison as a witness. That testimony will likely come on Wednesday and could provide more insight into Oracle's merger strategy.
PeopleSoft spokesman Steve Swasey said Conway was disappointed that he would not be testifying. "He would have had very compelling testimony about how this was an attempt to damage our business," Swasey said.
Earlier testimony, revealed Oracle had targeted Lawson, Siebel Systems Inc. and a number of other software vendors as potential takeover targets months before launching its June 2003 bid for PeopleSoft.
Closing arguments in the case, which will be decided by Walker, are set for July 20, although testimony could conclude as soon as Wednesday.
Lawson's Coughlan said he sees Oracle and PeopleSoft as its top rivals. Coughlan's testimony was sought by Oracle in order to demonstrate the business software market would stay competitive even if it completed a takeover of PeopleSoft.
Many large businesses, such as McDonald's Corp. and grocery chain Safeway Inc., use Lawson software to manage their human resources and financial operations, he said. Those two business areas are at the heart of the U.S. Justice Department's lawsuit.
In cross-examination, lead government attorney Claude Scott suggested Coughlan's testimony was biased since Oracle comments the past year naming the less well-known Lawson as a competitor had created sales and marketing opportunities for it.
That indirect boost from Oracle, Scott said, had prompted Lawson to take out a costly "Thanks, Oracle" advertisement in The Wall Street Journal on April 1, 2004, for keeping Lawson's name in the press in recent months.
The government has argued that Lawson and market leader SAP AG of Germany do not compete regularly enough with Oracle and PeopleSoft in the United States to prevent a combined company from potentially raising its prices.
But Coughlan said Lawson competed with Oracle and PeopleSoft on "almost every account," and at times beat Oracle and PeopleSoft for contracts. That contradicted testimony earlier in the one-month trial from a PeopleSoft executive who said Lawson rarely competed against PeopleSoft.
Jerry Hausman, an economics professor at the Massachusetts Institute of Technology, later testified as an Oracle witness that the government's market definition limiting the business software market to the United States was too restrictive.
"The demand driving the design of this software is not just demand from the United States but from all over the world," Hausman said.