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.
“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.
- SAP allays fears of Oracle bid war (Financial Times)
- Oracle Corp ratings unchanged on plan to buy BEA Systems for 6.7 bln usd (CNNMoney.com)
- Bagging BEA Systems Won't Be Easy (BusinessWeek)
- BEA Systems reiterates opposition to Oracle offer (Reuters)
- Oracle Corp ratings unaffected on plan to buy BEA Systems for 6.7 bln usd (Forbes)
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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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.