Representatives of attorneys general from several states, including Texas and California, are discussing the possibility of coordinated legal action to try to block Oracle Corp.'s hostile takeover of PeopleSoft Inc. on antitrust grounds.

Some attorneys general have scheduled a conference call Tuesday to discuss their responses to the possible merger. The discussion is a preliminary move that doesn't commit any of the states to follow the lead of Connecticut Attorney General Richard Blumenthal, who last week filed an antitrust suit seeking to block the deal.

But the discussion signals a high degree of interest in the matter among the states, some of which are PeopleSoft customers. State officials have expressed concern that an Oracle takeover could require costly technology conversions at a time when many states are slashing budgets.

Texas Attorney General Greg Abbott has apparently taken a lead role in convening other officials. Texas Assistant Attorney General Mark Tobey will participate in the call, a spokesman said. In a statement on Oracle's takeover bid last week, Mr. Abbott said, "We take great interest anytime a situation threatens competition and puts the customer, whether an individual or government entity, in jeopardy of paying higher prices for a particular product."

California Attorney General Bill Lockyer is considered to be in a difficult position because Oracle and PeopleSoft have headquarters in the state. Oracle is based in Redwood Shores, while PeopleSoft's offices are in Pleasanton. Still, Mr. Lockyer will have a representative on the conference call, said Tom Dresslar, a spokesman for Mr. Lockyer.


"We're still monitoring developments, including assessing the potential impact of a takeover on government agencies in California," said Mr. Dresslar. "At this point we have no plans to intervene legally or otherwise."

PeopleSoft has pointed to antitrust concerns, and the potential lengthy regulatory and legal proceedings that may be needed to resolve them, as reasons for investors to reject Oracle's revised offer of $6.3 billion, or $19.50 a share. PeopleSoft has argued that merging the No. 2 and No. 3 providers of software applications for running large businesses would limit customer choice. Oracle's sales of such applications are slightly higher than PeopleSoft's; both companies trail far behind SAP AG of Germany.

PeopleSoft Chief Executive Craig Conway met with Mr. Blumenthal of Connecticut earlier this month to discuss antitrust issues, said a person familiar with the matter. PeopleSoft won't participate in the conference call among state attorneys general, but several other states have contacted PeopleSoft to request lists of customers and express concern over the impact of an Oracle takeover, this person said. Public-sector and educational institutions account for 20% of PeopleSoft's customers.

Mr. Blumenthal said Monday he had talked with a number of fellow attorneys general. "There have been meaningful talks among the states already and those talks are increasing in pace and intensity," Mr. Blumenthal said. "I anticipate there will be strong and meaningful antitrust scrutiny of this transaction by the states."

Oracle spokesman Jim Finn said Mr. Conway is using antitrust issues to justify PeopleSoft's refusal to lift a "poison pill" antitakeover provision. "This is all a smoke screen to stop you from thinking about why he won't let shareholders choose," Mr. Finn said.

A PeopleSoft spokeswoman fired back, "That comment from Oracle is a reaction to PeopleSoft's customers coming out of the woodwork in support of the board's decision to reject Oracle's bid."

In recent years, state attorneys general, coordinated through the National Association of Attorneys General in Washington, D.C., have mounted joint actions on a number of high-profile antitrust cases, including the 1998 case against Microsoft Corp. A spokeswoman for the NAAG had no comment on the discussions concerning Oracle's bid for PeopleSoft.

As of 4 p.m. Monday in Nasdaq Stock Market trading, PeopleSoft rose 43 cents, or 2.5%, to 17.85, and Oracle fell 16 cents, or 1.2%, to 12.77.