Peoplesoft's bosses have rejected three previous Oracle bids

California-based PeopleSoft described Oracle's lowered hostile bid for the company as "inadequate".

Oracle dropped its cash offer by 19% earlier this month, to $7.7bn (�4.2bn), following a decline in PeopleSoft's share price.

Peoplesoft's board has already rejected three previous Oracle bids, including one offer at $9.4bn.

Shareholder action

The company said it also believed the offer by Oracle would be prohibited under US antitrust laws.

US authorities have called for an injunction to stop Oracle from buying Peoplesoft, saying the takeover would curb choice in the market place and push up prices.

Separately, PeopleSoft said it had settled a shareholder lawsuit relating to a refund plan which forms part of the company's defence against Oracle.

Shareholders sued PeopleSoft last year after it introduced a refund plan aimed at to preventing customers from defecting in the wake of Oracle's offer.

The plan promised to pay up to five times a customer's license fee if PeopleSoft was acquired within two years.