BEA's Ball Rolls Into Icahn's Court

So, unless Oracle (ORCL) or BEA (BEAS) budge from their current postures, or unless someone can prove that $17=$21, it looks like the Oracle bid for BEA is going to expire over the weekend.

That raises an obvious question: What happens now?

Well, that may be up to Carl Icahn. The activist investor, of course, holds a 13.2% stake in BEA.

Heather Bellini, software analyst at UBS, says that with the Oracle bid about to expire, “we see the ball being in the activists’ court to drive a potential deal forward.” Bellini also says, interestingly, that she thinks Oracle will in fact ultimately acquire BEA. “However,” she adds, “we do not expect an agreement over the weekend and we fully expect Oracle’s offer to expire Sunday night. As such, the key question will be that if Oracle eventually comes back to the table, will BEA’s execution have improved or will its valued have eroded.”

Bellini notes that the $21 a share BEA has said it would take to buy the company would be about 9.9x enterprise value/maintenance revenue on a trailing 12 months basis, considerably above the 6.4x Oracle paid for Peoplesoft, the 7.4x paid for Seibel and the 7.9x multiple for Hyperion.

Comments

[User 117911]

Why should a person like Carl Icahn have a say in this matter ? He is not even a investor but merely a trader who picked up shares of BEA recently. Now just because he wants an overnight return should this company be sold at any rate. Board of directors and other long term share holders who have been with this company for sometime should better judge this matter or decide the price.