Authorities in the US state of Connecticut are to file a competition lawsuit against business software giant Oracle to block its hostile bid to take over rival PeopleSoft.
The state is alleging that the takeover will flout state and federal competition laws, and harm the US economy, consumers and competition.
Earlier, Oracle boosted its increasingly hostile bid for PeopleSoft by $1.2 billion to $6.3 billion.
Oracle also announced that it would sue PeopleSoft, accused the board of failing to act in the shareholders' best interest, and demanded it remove a 'poison pill' obstructing the acquisition.
The increase in the bid to $19.50 a share from the initial offer of $16 came two days after PeopleSoft rejected the bid and reaffirmed plans to merge with rival business software group JD Edwards.
The clash between Oracle and PeopleSoft is shaping up as the most dramatic takeover battle in the technology world since the Internet bubble burst three years ago.
Oracle said it was filing a law suit in Delaware against PeopleSoft, its board of directors and JD Edwards for trying to remove PeopleSoft shareholders' ability to accept its takeover offer.
Oracle also demanded that PeopleSoft remove a 'poison pill', a tactic in which a company gives shareholders the right to many new shares, making it too expensive for a predator to buy them.
