Oracle Corp denied a newspaper report that Chief Executive Larry Ellison is backing down in a dispute with the European Union over the terms of the software company's $7 billion acquisition of Sun Microsystems Inc.
The New York Post reported on Friday that Oracle was prepared to address the EU's concerns about the future of Sun's MySQL database unit by offering to quarantine the division, running it as a separate business. The article cited two unnamed sources.
The New York Post article is completely untrue, said Deborah Hellinger, a spokeswoman for Oracle, the world's No. 2 business software maker.
Shares of Sun had risen as much as 6 percent in early Nasdaq trading following the New York Post report. The stock retreated to $8.38 by late morning, still up about 2 percent.
Hellinger declined to elaborate on the status of Oracle's efforts to win EU approval of its $7 billion acquisition of Sun.
Regulators in the 27-country EU have held up the deal for months, saying they are concerned the acquisition of Sun's MySQL database by Oracle could hurt competition in the $19 billion a year database market. Oracle is the world's biggest database software maker.
The New York Post reported that Ellison had proposed to EU regulators that he create a firewall between MySQL and the rest of Oracle. He also floated the idea of creating a separate board for MySQL, according to the newspaper.
That report cited its sources as saying there had been no talk of spinning off MySQL into a separate, public company.
DELAYS IN EU
The Oracle-Sun deal, which was signed in April, would help transform Oracle from a software maker into an integrated technology company that sells servers and storage equipment alongside its computer programs.
European authorities detailed their concerns last month in a document known as a Statement of Objections. The commission has until January 27 to clear or reject the acquisition. It will hold a hearing on the matter on December 10 in Brussels, according to people familiar with its handling of the case.
Analysts said it was unclear whether Oracle would need to make concessions to win EU clearance of the Sun deal.
Jefferies & Co analyst Ross MacMillan said that it was difficult to gauge whether Oracle was open to a compromise with the EU that might restrict the way it runs MySQL.
I don't know what to believe, MacMillan said.
MySQL is one of several assets that Oracle will gain with Sun, but it is the only one that antitrust regulators have singled out for scrutiny. Sun is the world's No. 4 maker of computer servers, owns the widely used Java computer language and is also a major supplier of data storage equipment.
Oracle has fought to keep MySQL, rather than divest it in a bid to quickly clear EU approval, because it can help the company expand into new markets and improve its competitive edge against rival Microsoft Corp.
Microsoft's SQL Server database is primarily used by small to mid-sized businesses, which is also MySQL's core market.
Delays in winning EU approval have resulted in what Oracle CEO Larry Ellison has said are hundreds of millions of dollars in losses for Sun, which is losing business to rivals IBM and Hewlett-Packard Co.
(Additional reporting by Foo Yun Chee; Editing by Lisa Von Ahn, Phil Berlowitz)