Rejected by BEA, Oracle sets bid deadline

Oracle has set a deadline for Sunday on its bid to buy BEA, which has officially rejected its US$6.7 billion offer.

Oracle said that BEA Systems has officially rejected its offer to acquire the company. BEA had previously said the offer was too low.

"Last night we were told by Bill Klein, Vice President-Business Planning and Development (speaking on behalf of the board), that BEA's board again rejected our proposed price of $17 per share in cash," Oracle said in a statement, adding that the BEA board "has refused to meet with us since we made our October 9th proposal."

Oracle set a deadline for Sunday at 5 p.m. local time on its US$17 per share bid. The total value of the bid is about US$6.7 billion. "Oracle has no interest in a long, drawn-out process to acquire BEA," Oracle said.

The letter's terse tone reflects the nature of the Oracle and BEA merger talks, which have been marked by dueling public statements and cancelled meetings. Oracle is well-used to grueling acquisition processes, however, such as when it bought PeopleSoft. But the company sent a clear signal that it is not interested in another long battle.

If it succeeds in buying BEA, Oracle would swallow up a major competitor in the application server space, a scenario that has had some observers wondering about the fate of BEA's technologies.

Oracle's move to purchase BEA is only the latest in a string of high-profile buys in 2007. The company has forked over billions for a wide array of enterprise software companies, including business process management vendor Hyperion Solutions and application data grid player Tangosol. An Oracle spokesperson said there would be no additional comment.

"The saga continues," Forrester Research analyst Ray Wang said in reaction to BEA's move.

"Like any board of directors, they're responsible to their shareholders," Wang said of the BEA contingent. "If they say no, Oracle can keep trying."

But it remains unclear whether Oracle will increase its offer -- which it termed "generous" in the statement -- if BEA does not meet the deadline. "Oracle typically has some [pricing] ratios it uses in its acquisition strategy," Wang said. "If they really want to dominate the middleware space, this is an acquisition they'd want to make."

BEA has some products that would fill holes in Oracle's portfolio. But the two companies compete closely on other fronts, such as Web server and enterprise service bus (ESB) offerings.

"Those are areas with lots of overlap," Wang said. "But there's a lot of good technologies on both sides."

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Marc Ferranti

IDG News Service
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