Oracle chief executive Larry Ellison has fought hard to pull off the deal

Peoplesoft's board has approved an improved bid from its business software rival - worth $26.50 a share - after spurning five previous offers.

Oracle appealed to Peoplesoft investors to approve the bid last month, winning the support of 60% of shareholders.

The deal is a personal victory for Oracle chief executive Larry Ellison.

Five offers

Mr Ellison has been pursuing Peoplesoft for more than 18 months, initially making a $5.1bn offer for Oracle's rival in June 2003.

Oracle has since seen another five offers rejected, ranging in value from $7.7bn to $9.4bn.

This merger gives Oracle even more scale and momentum Larry Ellison, Oracle

Last month, Peoplesoft's board of directors turned down a $9.2bn bid - which Oracle described as its final offer - calling it "inadequate".

Despite the support of a majority of Peoplesoft investors, Oracle has been forced to raise the offer by a further 10% to win the backing of Peoplesoft's board.

"This merger gives Oracle even more scale and momentum," Mr Ellison said.

"This merger works because we will have more customers, which increases our ability to invest more in applications development and software."

The deal should be concluded by the end of next month.

Hard-fought battle

The merged companies are set to be a major force in the enterprise software market, second only in size to Germany's SAP.

Peoplesoft's acceptance marks the end of one of the most drawn-out and hard-fought US takeover battles of recent times.

Peoplesoft bosses consistently maintained that Oracle was trying to buy the firm on the cheap.

In the middle of the takeover battle Peoplesoft fired chief executive and president Craig Conway, claiming it had lost confidence in him.