Oracle turns up the heat on BEA takeover

Oracle has set a deadline of Sunday October 28 for BEA to accept its acquisition bid or put it before a shareholder vote.

Oracle on 15 October offered to pay $17 per share – about $6.7bn – for the middleware vendor. BEA turned down the offer, arguing that the company was worth substantially more.

In his latest communication, Oracle president Charles Philips said that the company would not raise its offer.

"Oracle urges the BEA board of directors to let BEA's shareholders decide: sign an acquisition agreement with Oracle and allow the shareholders to vote. Oracle believes that our $17 per share price is generous and there are no offers for BEA above $17 per share," Phillips said.

The offer marks a 21 per cent premium to BEA's closing price prior to the bid. News of the planned acquisition, however, caused BEA stock to jump to nearly $19. Oracle's letter indicating a refusal to raise its offer reversed the tide on BEA's stock price. Shares in the middleware vendor are currently trading at around $18.

BEA president William Klein repeated his objection to the proposed price.

"If Oracle is genuinely interested in acquiring BEA, you are fully capable of proposing a reasonable price to the BEA board or taking any offer you wish directly to BEA shareholders," Klein wrote in response to Philips' latest letter.

Anne Thomas Manes, a vice president and research director with analyst firm the Burton Group, told vnunet.com that she believed that the acquisition will go through.

"I expect Oracle to come back with a slightly higher bid, but it's going to happen," Manes said.

BEA has repeatedly been the subject of acquisition rumours, Manes pointed out, prompting customers to delay purchases or opt for a vendor that they deem more viable.

"BEA's viability has been tenuous for a couple of years now. That's not good for BEA and not good for BEA customers."