BEA rejects Oracle buyout offer

BEA's board of directors has refused Oracle's unsolicited bid to buy the company saying the offer significantly under-values BEA Systems.

Oracle is seeking to acquire BEA Systems for $17.00 per share in cash. Oracle said it had written to middleware maker BEA's board of directors on Tuesday to make the offer, which represents a premium of 25% over BEA's closing share price on Thursday. The Wall Street Journal valued the offer at $6.66 billion.

MarketWatch.com says Carl Icahn, who owns a 13% stake in BEA, said in a television interview that he is more receptive to the offer but also feels it undervalues the company. BEA's board sent a letter to Oracle Thursday stating that it cannot become involved in any kind of open-ended negotiations with Oracle covering sensitive information because the two companies are direct competitors.

Oracle said the acquisition would help it to beef up its own middleware suite, an important area for the company that is serving to link several families of business applications that it has acquired. It would be the software giant's 10th acquisition this year. The company has spent some $30 billion in acquisitions in the past three years.

"This proposal is the culmination of repeated conversations with BEA's management over the last several years," Oracle President Charles Phillips said in Friday's statement. "We look forward to completing a friendly transaction as soon as possible."That doesn't seem likely at the moment. But Oracle has been down this road in the past. It's purchase of PeopleSoft didn't go smoothly in 2005, for example.

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