Oracle Bids $17/Share for BEA Systems

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Includes: BEAS, ORCL
by: SA Eli Hoffmann

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.

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