Oracle beats up on BEA

Posted Oct 12th 2007 6:24PM by Tom Taulli
Filed under: Oracle Corp (ORCL), Technology

For years, there have been rumors that Oracle, Inc. (Nasdaq: ORCL) would buy up BEA Systems, Inc. (Nasdaq: BEAS).

And, it's finally coming true; that is, Oracle is making a $6.7 bid for the meandering software company.

No doubt, the deal is a good fit. BEA has a strong customer base – and solid technology (especially with middleware). Besides, Oracle likes to buy recurring maintenance revenues (which tends to be fairly resilient). I also think there will be lots of opportunities to slash costs and get rid of some product lines.

However, the problem is that BEA is likely to put up a fight. In fact, I suspect BEA's business will deteriorate as customers get scarred. After all, this happened when Oracle bought PeopleSoft.

So, as time goes by, I think we can hear some interesting smash-mouth from both parties.

Also, if you want to see other recent acquisitions, click here.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements.

Tags: BEA System, BeaSystem, Software

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Reader Comments (Page 1 of 1)

10-15-2007 @ 6:14AM

CrossProfit said...

A slightly different take on the acquisition scene.

"In a press release, Charles Phillips (president ORCL) is quoted as describing the offer as "the culmination of repeated conversations with BEA's management over the last several years." Yeah, right. He meant to say that ORCL has been unsuccessful in closing a friendly deal over the past several years. (That long?) Now the question is, will BEAS be open-minded about any offer or are they still not ready to sell."

See full article at: http://www.crossprofit.com/article.asp?id=125

If BEAS wanted to sell, they could have done so a long time ago.

Another follow-up article by Saul Sterman that reveals another angle can be viewed at:
http://www.crossprofit.com/article.asp?id=126

You are correct about the BEA customer base. This is precisely what makes BEAS an acquisition target.

CrossProfit