Oracle, the American corporate software giant, has admitted it is feeling the pressure of its protracted takeover battle for PeopleSoft, saying that it was worried that valuable staff were starting to leave its acquisition target.

The announcement came as Oracle entered the 18th month of its hostile bid for its rival for the market in systems that power everything from sales to human resources departments.

Safra Catz, Oracle's co-president, told an audience of developers and customers here that she was determined to take on large numbers of PeopleSoft's developers – who she described as the "crown jewels" of a software company.

But she said there were particular concerns over the fate of key staff originally employed by JD Edwards, another corporate software company acquired by PeopleSoft last year.

"One of the reasons why we have been in so much of a hurry is because we are very concerned about the state of the JD Edwards intellectual property," she said. Our hope is that it is still in a position where we can maintain it.

Her concerns added to recent warnings from analysts that the delay and uncertainty around the deal were damaging PeopleSoft and causing it to lose business to other corporate software vendors, chief among them Germany's SAP, the sector leader.

She promised to "over-support" PeopleSoft's customers once the sale went through to avoid undermining the business. "We need to spend as much as SAP on research and development .... A larger customer base is the only way to do it."

Oracle launched its hostile takeover bid in June 2003, kicking off a battle with PeopleSoft's board who repeatedly claimed that the offer was too little. Last month, PeopleSoft once more rejected Oracle's "best and final" offer of $9.2 billion, or $24 a share.

Oracle has already secured US and European regulatory approval for the bid. Last month, it received another boost when investors who own 61 percent of PeopleSoft stock backed the proposed sale. Next week, Oracle will be in court, asking a Delaware judge to order PeopleSoft to lift a "poison pill" anti-takeover defence.

If the court action fails, Ms Catz said, Oracle plans to push on with a back-up strategy of putting up its own candidates to fill vacancies due to come up on PeopleSoft's board next year. If Oracle's candidates get on to the board, they would be able to dissolve the poison pill themselves.

Ms Catz shared a stage with Scott Klimke, chief information officer of Network Appliance, a user of both Oracle and PeopleSoft software who said he backed Oracle's bid.

"There has been a lot of hooey in the press about any type of consolidation in the technology space as limiting the amount of choice customers have," he said. "I totally take issue with that. For customers, we now have access to some of the best and the brightest software, consulting talent. We will be the beneficiary of a combined R&D budget, products will be out faster. They will be more competitive."

PeopleSoft later denied that it had laid off any significant numbers of developers. "We put a premium on developers," said a spokesman. "At the time of the PeopleSoft deal we reduced duplicate positions. But we said very clearly that sales people, customer-facing people and developers were off limits."

He added that, while Oracle was the bigger company when you included its dominant database arm, its corporate software operation was actually smaller than PeopleSoft's. PeopleSoft was more than capable of developing compelling new products on its own he added.

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