BEA Systems Rejects Oracle Bid

BEA Systems turned down Oracle's $6.7B takeover bid (full story), saying the company was "worth substantially more." The move sparked speculation of a bidding war as BEA shares surged 38% to $18.82, their highest level in more than five years and nearly $2 above Oracle's $17 offer. "It is apparent to our board that BEA is worth substantially more to Oracle, to others, and, more importantly, to our shareholders than the price indicated in your letter," BEA said in rejecting the offer. Oracle, in response, said it remained committed to the $17 bid and was available to "proceed immediately with a process that would lead to a friendly transaction." BEA, meanwhile, denied that it had agreed to meet with Oracle to hammer out a definitive agreement by Monday morning, as Oracle had stated in a letter to BEA. Also weighing in, shareholder activist Carl Icahn, who disclosed in August that he held a stake in BEA and last month said he sought a sale of the company, suggested to BEA that it might want to proceed with an auction. SAP, however, said it would not participate in any fight for BEA, saying it was interested in "complementary deals" and not a "classic consolidating of markets."

Sources: Oracle letter, Reuters, MarketWatch, Financial Times
Commentary: Oracle and BEA: Getting Uglier By The Minute • Oracle's Bid for BEA Systems Comes at the Perfect Time
Stocks to watch: ORCL, BEAS. ETFs: IGV, SWH, PSJ. Competitors: SAP, IBM, JAVA
Earnings call transcript: BEA Systems F2Q08

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