Oracle chief Larry Ellison hoped the latest offer would clinch the deal

The firm's directors unanimously dismissed the bid, leaving Peoplesoft's shareholders to decide by 19 November whether to accept Oracle's bid.

Oracle has set the imminent deadline for what it has described as its "final offer", saying it will walk away unless a majority of investors accept it.

Peoplesoft's shares fell 23 cents to $22.79 after its decision became clear.

Inadequate

Peoplesoft has now rejected five separate takeover approaches from Oracle over the past eighteen months.

Peoplesoft described Oracle's latest bid as "inadequate" claiming the firm's value had increased significantly since February when Oracle made a higher $9.2bn offer.

We believe it is clear that Oracle wants to acquire Peoplesoft to rescue its own declining applications business George Battle, Peoplesoft

Oracle has since lowered its offer, claiming that Peoplesoft's sale prospects have diminished considerably since the start of the year.

Oracle responded to Peoplesoft's decision by saying it was "time to bring this matter to a close".

"We absolutely believe that PeopleSoft is worth far more today than at any point since the process began," said George Battle, chairman of Peoplesoft's independent transaction committee.

"We believe it is clear that Oracle wants to acquire Peoplesoft to rescue its own declining applications business," he added.

Closing time

It is now time to bring this matter to a close Larry Ellison, Oracle

Oracle said it would leave the matter up to Peoplesoft's shareholders which it has been courting in recent weeks.

"Oracle has been at this for a year and a half and it is now time to bring this matter to a close," said chief executive Larry Ellison.

Mr Battle said that Peoplesoft had acquired 418 new customers to date this year and generated $422m in license revenue.

Even if a majority of Peoplesoft shareholders decide to accept Oracle's offer, the bitterly fought battle between the two companies is likely to move to the courts.

Peoplesoft has instituted a 'poison pill' defense strategy which would mean that Oracle or any other suitor would have to pay considerably more to take control of the firm.