PeopleSoft Says It May Buy Back Momentum
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PeopleSoft Inc. may reacquire Momentum Business Applications Inc. to avoid paying software royalties and ease investor concerns that the companies’ relationship obscures PeopleSoft’s expenses.
Chief Financial Officer Kevin Parker said PeopleSoft, of Pleasanton, Calif., will decide soon whether to exercise an option to buy Momentum. PeopleSoft spun off Momentum, also of Pleasanton, in 1999 to boost profit by shifting some software development costs, an accounting arrangement that rule makers have since banned.
PeopleSoft shares lost $2 to close at $40.20, and Momentum fell 10 cents to $19.90, both on Nasdaq.
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