BEA Systems to Give Icahn Confidential Information

BEA Systems on Monday agreed to provide activist investor Carl Icahn with confidential business information to convince its largest shareholder that a sale of the company at $17/share "significantly undervalues" the infrastructure software company. "We are confident this information will enable him to appreciate that the $17 per share bid from Oracle significantly undervalues BEA in a sale. All shareholders' interests are aligned in this regard," said CEO Alfred Chuang. "We also want to dispel any speculation that we would engage in 'scorched earth' transactions to entrench ourselves at shareholders' expense or discourage a fully valued acquisition of the company. We will undertake no such actions. Our goal has always been to maximize shareholder value, and we continue to explore ways to further this fundamental goal, including the possible sale of the company." BEA is hoping to convince Icahn it is worth at least $8.2B, or $21/share, after turning down Oracle's bid, which subsequently was withdrawn after Oracle called BEA's demands "impossibly high" (full story). Icahn, who owns more than 13% of BEA, has been pushing for a sale of the company. He, too, has called $21 too high, terming it a "management entrenchment tactic." One analyst said the move, which is designed to bring Icahn into the company's camp, could backfire if he, too, determines even after reviewing the confidential information that $21 is excessive.

Sources: Press release, AP, Barron's, CNET News.com, MarketWatch
Commentary: Oracle's BEA Systems Take-Under? • Why BEA Systems Should Sell Itself to AT&T • Will BEA Find Another Suitor?
Stocks to watch: BEAS. Competitors: IBM, ORCL, JAVA. ETFs: IIH, PSJ
Earnings call transcript: BEA Systems F2Q08

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