BEA did say, however, that it is open to the idea of being acquired by Oracle.
Oracle said it is sticking to its $17-per-share offer, correctly noting that it’s a juicy premium over BEA’s trading price before rumblings of an acquisition kicked off in August.
Oracle has no interest in a long, drawn-out process to acquire BEA, Oracle president Charles Phillips wrote to the BEA board in a letter published yesterday.
If the BEA board refuses to execute an acquisition agreement and refuses to let their shareholders vote, then our $17 per share proposal to acquire BEA will expire at 5 pm, PDT, on Sunday, October 28, 2007, he wrote.
BEA vice president William Klein wrote back a few hours later to tell Phillips the company is sticking to its guns in that it simply cannot accept an offer that seriously undervalues BEA.
BEA’s shares have been trading substantially higher than $17 since the acquisition offer was made over a week ago, but lost almost 4% yesterday to close at $17.87.
The board is merely performing its fiduciary duty to shareholders by turning down Oracle’s offer, Klein wrote. Despite Oracle’s claim that BEA refuses to meet to discuss a deal, the company is open to offers, he suggested.
BEA’s Board has not indicated that it would be opposed to a transaction that appropriately reflects BEA’s value, reached through a reasonable process, Klein said in his letter.
If Oracle is genuinely interested in acquiring BEA, you are fully capable of proposing a reasonable price to the BEA Board or taking any offer you wish directly to BEA shareholders, he wrote.
Oracle’s $17 bid is, according to Phillips, a 21% premium to BEA’s closing price before the offer was announced, a 31.5% premium to the 52-week closing average, and a 44% premium on the price on the date before Carl Icahn, BEA’s largest shareholder, said he had taken a hefty stake in the company.
Icahn has already encouraged BEA to sell, but has agreed with the board that the current offer is two low.
Since the offer was announced, no other potential bidders have publicly revealed themselves, and some front-runners, including Oracle’s chief competitor SAP, have specifically rule themselves out.
The question remains: is Oracle prepared to walk away so soon, or is BEA calling Oracle’s bluff?
The latter seems more likely, based on Oracle’s history of actually sticking to its self-imposed deadlines during takeover talks, which is laughably poor.
During the wrangling for control of PeopleSoft, it changed its best and final offer price five times, and frequently set and later abandoned deadlines.
