BEA Systems: Too smart for its own good?

Posted Oct 24th 2007 10:47AM by Douglas McIntyre
Filed under: Deals, Oracle Corp (ORCL)

Oracle (NASDAQ: ORCL) has given BEA Systems (NASDAQ: BEAS) until Sunday to accept its buy-out offer. Oracle has offered $17 a share. Before the buy-out rumors started to move the stock up, it traded around $14.

According to Reuters, "BEA responded by saying it had no intention of coming to the negotiating table unless Oracle raised its bid." That is despite the fact that Carl Icahn has taken a piece of the company and wants a sale.

BEA has almost certainly hoped for a second bidder, but that phantom buyer has not emerged.

While the board of the company plays a game of chicken with Oracle, the common shareholder may be left holding the bag. It has a sure thing at $17; the rest is hot air. With Goldman as its bank, BEA has almost certainly contacted all other potential buyers.

The BEA board should do the right thing -- sell the company and get the common shareholder a good return. Board members should make money on their own options and go home and sleep well tonight knowing that there will not be class action suits from people who know they did not take the bird in the hand.

Douglas A. McIntyre is an editor at 247wallst.com.

Tags: BEA Systems, BEAS, BeaSystems, inthenews, oracle, orcl

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Reader Comments (Page 1 of 1)

10-24-2007 @ 11:03AM

Theodosius said...

Sorry, but BEA shot itself in the foot. The offer from Oracle was more than fair. While I understand that BEA was undervalued, was it worth more than $17 a share? No way. This deal is a week old, if any 3rd buyers were gonna make a move they probably would have done it by now. While it's possible that Oracle and BEA are using some of their shared backchannels for negotiations ( http://www.newsvisual.com/newsvisual/2007/10/oracle-and-bea.html ) I doubt Oracle is going to raise their bid. Although never say never as Oracle did raise it's bid for PeopleSoft.