The Oracle Corp. may abandon its hostile takeover of PeopleSoft because the software maker is promising generous refunds if the deal is completed.

PeopleSoft’s so-called Customer Assurance Program may cost Oracle an extra $800 million. Oracle said in court papers last week that the takeover would not be economically feasible if PeopleSoft is allowed to continue with the program, which was described as a "poison pill" to ward off an unsolicited suitor.

Oracle asking the Delaware Court of Chancery to order PeopleSoft to stop the program, which the company launched started shortly after Oracle began its takeover bid in June.

PeopleSoft is telling its customers that if Oracle takes it over and fails to meet certain software-support conditions, the client is guaranteed money back—from the acquiring company. That means Oracle would have to pay customers refunds two to five times their initial license fee, which is often tens of millions of dollars or more.

Oracle said it was not aware that the refund program could cost them as much as $800 million until Oct. 27, during a conference call on PeopleSoft’s third-quarter earnings. PeopleSoft had previously said the program would affect only $60 million in sales.

Oracle executives, who are offering to buy PeopleSoft for $19.50 per share, have repeatedly said the company would support some versions of PeopleSoft products for 10 years, but they don't intend to sell them to new clients or develop new PeopleSoft products.

PeopleSoft executives, who announced a takeover of business-software provider J.D. Edwards only days before the Oracle bid, worry that Oracle could migrate PeopleSoft customers to Oracle products. PeopleSoft defended the refund program as a “prudent measure.”