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Oracle attempts to acquire BEA for $6.7 billion

Oracle Corporation, the world's third-largest software company, made a failed hostile attempt to acquire BEA Systems Inc. for $6.7 billion last Friday. BEA executives rejected the offer as too low.

Oracle Corporation, the world's third-largest software company, made a failed hostile attempt to acquire BEA Systems Inc. for $6.7 billion. BEA executives rejected the offer as too low.

Oracle's bid came in at $17-a-share, or 25 percent more than BEA's closing price on Thursday. BEA's share price surged up 38 percent to $18.82 in response.

Excerpt from The New York Times:

“BEA is worth substantially more to Oracle, to others and, importantly, to our shareholders,” William M. Klein, BEA’s vice president for business planning and development, said in a letter Friday to Oracle’s president, Charles E. Phillips Jr. Mr. Klein said the deal was complicated by BEA’s internal investigation into stock option grants.

On whether Oracle will make a higher bid:

Oracle has shown a willingness in the past to raise offers, and analysts expected it to do so again. In 2003, Oracle made a $16-a-share bid for PeopleSoft, and spent more than a year fighting an antitrust battle. In the end, Oracle paid $26 a share. Since then, the company has spent more than $21 billion buying 33 software companies.

According to Standard and Poor's Rating Services, the merger with BEA is expected to strengthen Oracle's market position in billing and supply chain management software applications.

Additional reading:

According to an estimate by Bloomberg News, Oracle has acquired 35 companies since 2005 for just over $31 billion. What is your opinion of Oracle's growth-by-acquisition strategy?

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About

Paul Mah is a writer and blogger who lives in Singapore, where he has worked for a number of years in various capacities within the IT industry. Paul enjoys tinkering with tech gadgets, smartphones, and networking devices.

6 comments
admin.graca
admin.graca

I just wanted to leave my though ... although I prefer Oracle db's over Microsoft you must admit that if it was Microsoft doing this kind of acquisitions everyone would quickly point their finger accusing Microsoft of trying to get the software monopoly.

singhrajender
singhrajender

100% agree with you.For long time Microsoft has been target of such hatred.

paulmah
paulmah

What is your opinion of Oracle?s growth-by-acquisition strategy?

bstockha
bstockha

I hope BEA continues to fight this takeover. I, for one, am tired of seeing Larry Ellison successfully roll over smaller companies in his effort to monopolize the market.

Stangg
Stangg

At first I read that as BAE and was slightly worried about Oracle's direction...