Oracle Bids $17/Share for BEA Systems

Oracle Corp. said early Friday it has proposed to buy BEA Systems Inc. for $17/share, a 25% premium over BEA's Thursday close of $13.62. The proposal was made in a letter sent to BEA's board on October 9. "The acquisition of BEA by Oracle will enable an increase in engineering resources that will in-turn accelerate the development of our world-class suite of middleware. Both Oracle and BEA customers will benefit from this increase in engineering investment as they migrate to modern SOA technologies," the company said in a press release. Activist investor Carl Icahn has been building a stake in BEA; in an Oct. 5 SEC filing he disclosed an 13.2% stake (52M shares including underlying call options) in the company, up from an 11% stake disclosed in on Oct. 3. A previous filing said Icahn believes a sale of the company to a strategic acquirer will maximize the price of the shares. Icahn said he was seeking talks with management to discuss possibilities of a deal, and that he may seek to nominate members for election to the company's board.

Sources: Press release, Seeking Alpha
Commentary: Icahn Boosts Stake in BEA Systems to 13.2% • Virtualization Should Keep BEA Going • Is It Time For BEA Systems To Find A Buyer?
Stocks to watch: ORCL, BEAS

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Comments

[DennisByron(Research2.0)]

Given the reported October 9 date on the Oracle letter to BEA management, I guess Larry couldn't even allow one day to go by with SAP surpassing Oracle in the middleware market (as Oracle defines middleware). SAP probably had a few short hours ahead of Oracle based on SAP's acquisition of Business Objects on October 8.

I hadn't even backcast for this week's earlier news yet because it's never over 'til its over. But for BEA, I do think it's over. It was a good run, Alfred. Who would have thought there was so much value in some AT&T Tuxedo distributorships?

[King Kang]

BEA is now saying that the offer from Oracle is too low. This seems a bit of stretch to me. I know BEA was undervalued, but not by this much. Could be the beginning of another bidding war. Well, if that does happen at least these backchannels for negotiations should remain open www.newsvisual.com/new...

[ratsharp]

try looking at oracle's purchases ..where they start the bid and where they end ... the answer my friend is blowing in the wind ... so use 17 as a base..and then use a simple risk reward..