"The board concluded that the proposed combination of PeopleSoft and Oracle faces substantial regulatory delays and a significant likelihood that the transaction would be prohibited," it said in a statement.

"Those delays and uncertainties, combined with Oracle's stated intentions to discontinue PeopleSoft's products, would subject PeopleSoft's business to irreparable damage."

The Oracle offer failed to match the value of PeopleSoft, based on its financial performance and future prospects, the board said.

"Oracle's offer undervalues the company and is not in the best interest of PeopleSoft stockholders," PeopleSoft president and chief executive Craig Conway said.

"It is highly conditional, faces significant regulatory delays and uncertainty, and threatens serious damage to our business."

SPACE.WIRE