SAN FRANCISCO - To thwart Oracle Corp.'s hostile takeover, business software maker PeopleSoft Inc. has revived promises of large customer refunds if its products are spoiled by its rival's bid, the company has revealed.

The generous sales incentives - refunds equal to two to five times of a sales amount - are similar to guarantees that PeopleSoft made to attract more customers in the second quarter, spokesman Steve Swasey said Tuesday.

The company ended the program in July, but Swasey said management decided to renew the refund promises recently because Oracle's unflagging pursuit continues to raise questions about PeopleSoft's future.

Pleasanton-based PeopleSoft is committing to issue the refunds if the company is sold and the new owner makes dramatic changes to products or software services within the next two years.

PeopleSoft is suing Redwood Shores-based Oracle for damages, alleging the hostile takeover bid is little more than a bullying tactic designed to drive a major competitor out of business.

The obligations are designed to make it even more expensive for Oracle to complete its hostile takeover bid, which has climbed from $5.1 billion, or $16 per share, in early June to $7.5 billion, or $19.50 per share.

The proposed takeover now includes another business software maker, J.D. Edwards & Co., that PeopleSoft is buying for $1.8 billion in cash and stock.

If it buys PeopleSoft, Oracle doesn't believe its business plans would trigger the refunds. Oracle executives say PeopleSoft's products would still be supported for at least a decade after the takeover.

The refund pledges that PeopleSoft made in the second quarter could cost a new owner $391 million, according to the company's most recent estimates.

The customer assurances helped PeopleSoft sell new software licenses totaling $111.7 million during the second quarter, much more than industry analysts anticipated.

The pleasant second-quarter surprise raised concerns that PeopleSoft's customers might have accelerated their spending plans to take advantage of the refund guarantees - a scenario that might diminish the company's future sales.

Oracle spokesman Jim Finn derided the renewal of the refund program as a desperate sales gimmick that demonstrates PeopleSoft's management is having trouble with its J.D. Edwards acquisition. "It's a deal without a plan," Finn said Tuesday.

Industry analysts, though, are becoming more optimistic about PeopleSoft's prospects with J.D. Edwards in the fold.

Midwest Research analyst Trip Chowdhry provided a bullish outlook in a report released Tuesday, the day after Bank of America Securities analyst Bob Austrian upgraded PeopleSoft's stock for the first time in five years. Austrian has set a $23-per-share price target for PeopleSoft's stock while Chowdry thinks $26 is within reach.

PeopleSoft's shares gained 30 cents Tuesday to close at $17.30 on the Nasdaq Stock Market.

Oracle's bid is on hold while federal antitrust regulators examine how the proposed combination will affect competition in the $20 billion market for business applications software. Oracle executives recently indicated the examination won't be wrapped until November.