Oracle Corp. raised its hostile bid for PeopleSoft Inc. to $19.50 a share, or $6.3 billion, from an initial all-cash offer of $16 a share, which had been widely regarded as too weak to succeed. Oracle also announced plans to file suit against PeopleSoft and its would-be acquisition, J.D. Edwards & Co.

The Redwood City, Calif., software maker said Wednesday that it had sweetened its bid by more than $1 billion after discussions with holders of a majority of PeopleSoft shares.

"Many of those shareholders indicated the prices at which they would tender their shares," Oracle Chairman and Chief Executive Larry Ellison said in a prepared statement.

The latest bid represents a 29% premium to PeopleSoft's stock price before Oracle first announced its intentions on June 6.

In morning trading Wednesday on the Nasdaq Stock Market, shares of PeopleSoft were up $1.10, or 6.4% to $18.10, while Oracle was up 9 cents to $13.44.

On Monday, PeopleSoft, Pleasanton, Calif., amended its all-stock $1.75 billion offer for J.D. Edwards to include more than $850 million in cash, eliminating the need for a shareholder vote so it can complete the friendly deal sooner.

Despite having to raise its offer, Oracle still thinks acquiring PeopleSoft would add to its earnings, excluding the amortization of intangibles.

Oracle, which has been seeking to counter concerns that it would abandon PeopleSoft products, said it plans to "fully support" PeopleSoft customers and products for years to come. "Satisfying those customers is the key to the success of this acquisition," Mr. Ellison said.

Last week, PeopleSoft's board rejected Oracle's bid, saying it was a low-ball, anticompetitive offer aimed at disrupting its operations in the $20 billion market for business applications software. Oracle called the complaint "frivolous."

Oracle said it plans to file a lawsuit Wednesday in Delaware against PeopleSoft, its board and Denver-based J.D. Edwards for what it called their collective efforts to eliminate PeopleSoft shareholders' ability to accept Oracle's tender offer.

The suit will contend that PeopleSoft and its board breached their fiduciary duties, charging they failed to act in the best interest of PeopleSoft's shareholders. Oracle is seeking, among other things, to nullify PeopleSoft's amended J.D. Edwards offer and to cancel PeopleSoft's poison-pill provision, a typical shareholder-rights clause designed to make any threatened takeovers more expensive through the issuance of huge amounts of stock.

Last week, J.D. Edwards sued Oracle in courts in Colorado and California, alleging Oracle interfered with its acquisition by PeopleSoft. Oracle has responded that the suit has no merit.

"Oracle remains committed to acquiring PeopleSoft and will not be deterred by management's maneuvers to maintain control of a company they do not own," Mr. Ellison said Wednesday.

PeopleSoft shares ended regular trading Tuesday at $17.15, up 40 cents, or 2.4%. Oracle shares fell 30 cents, or 2.2%, to closed $13.35, and J.D. Edwards rose 12 cents, or 0.9%, to $13.89. All stocks trade on the Nasdaq Stock Market.