Oracle threatens to drop BEA takeover bid
Demands shareholder vote by Sunday
By
Jon Brodkin
,
Network World
, 10/23/2007
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Oracle on Tuesday threatened to withdraw its bid to purchase BEA Systems if BEA doesn’t let its shareholders vote on the proposal by Sunday.
BEA yesterday rejected – for a second time – Oracle’s proposal to purchase the company for $17 per share, or $6.7 billion,
according to a letter sent by Oracle President Charles Phillips to BEA’s board of directors Tuesday morning. BEA contends
the offer significantly undervalues the company, though Oracle says it represents a 21% premium over BEA’s share price on
Oct. 8, the day before Oracle made its takeover bid.
“The [BEA] board has refused to meet with us since we made our October 9th proposal,” Phillips wrote in the Tuesday letter.
“Oracle has no interest in a long, drawn-out process to acquire BEA. If the BEA board refuses to execute an acquisition agreement
and refuses to let their shareholders vote, then our $17 per share proposal to acquire BEA will expire at 5 p.m., PDT, on
Sunday, October 28, 2007.”
Oracle’s threat to take its proposal off the table caused BEA’s shares to drop in price, according to The Wall Street Journal. BEA shares rose initially after Oracle announced its takeover bid, reaching $18.59 on Nasdaq Monday. The price has since
fallen to $17.85, the Wall Street Journal said.
BEA’s first rejection of Oracle’s offer came in a letter dated Oct. 11. “It is apparent to our board . . . that BEA is worth
substantially more to Oracle, to others and, importantly, to our shareholders than the price indicated in your letter,” BEA
wrote. “We are very sensitive to the fact that Oracle is a direct competitor of BEA. Therefore the Board cannot consider any
process which is long in duration, open-ended in nature, or would divulge competitively sensitive information which could
materially harm our business and our shareholders’ interests.”
Comments (2)
RE: Oracle threatens to drop BEA takeover bidBy Ken on October 24, 2007, 8:41 amSince BEA is rejecting Oracle's offer, Oracle's arrogant, as usual, threat seems like a little kid that didn't get his way!
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Oracle BEA purchaseBy Anonymous on October 24, 2007, 10:12 amEven after the Oracle announcement the BEA shares are still trading at a priemum to the $17 offer by Oracle. This just indicates to me that the offer is possibly...
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