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October 12, 2007updated 19 Aug 2016 10:08am

Oracle bids for BEA.. will SAP buy Tibco?

Typing this with one hand, healthy 10 day-old baby boy in the other!Oracle has made a bid for BEA of $17 per share, 25% above its closing price. No word from BEA management just yet but it will be tough for them to reject such a high premium.

By Jason Stamper Blog

Typing this with one hand, healthy 10 day-old baby boy in the other!

Oracle has made a bid for BEA of $17 per share, 25% above its closing price. No word from BEA management just yet but it will be tough for them to reject such a high premium.

Interestingly Oracle says it delivered the offer in a letter on October 9, suggesting, to me anyway, that BEA’s management didn’t want to sell in more congenial discussions, leaving Oracle to initiate hostile takeover proceedings just like it did with its PeopleSoft buy.

In a statement Oracle’s president Charles Phillips said, “We have made a serious proposal including a substantial premium for BEA. We believe our all cash offer provides the best value for BEA’s shareholders and the best home for BEA’s employees and customers. This proposal is the culmination of repeated conversations with BEA’s management over the last several years. We look forward to completing a friendly transaction as soon as possible.”

He added, “We intend to protect the investment customers have made in BEA’s products by supporting those customers and products for years to come. Our continuing support commitment has been amply demonstrated with all of our previous acquisitions, including PeopleSoft and Siebel. BEA will be no different. The acquisition of BEA by Oracle will enable an increase in engineering resources that will in-turn accelerate the development of our world-class suite of middleware. Both Oracle and BEA customers will benefit from this increase in engineering investment as they migrate to modern SOA technologies.”

It will be interesting to see how BEA reacts. From my meetings in the past with BEA CEO Alfred Chuang there is no company he would less like to sell the firm to. But with a 25% premium on the table he may have no choice.

I blogged a while back that there was a rumour that SAP might buy Tibco, another major middleware force. The ink may be hardly dry on SAP’s acquisition of Business Objetcs, but if Oracle succeeds in acquiring BEA then SAP may well bolster its own NetWeaver middleware offering with a Tibco purchase, or another independent middleware provider. NetWeaver is good technology but not as heterogeneous as it could be; Tibco is great, heterogeneous middleware able to do everything from the highest transaction loads to more modern SOA and service bus stuff.

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I guess it was only a matter of time before middleware became the next battleground between Oracle and SAP: suddenly the spotlight will be shone on this often overlooked sector of the software market. I hope the independent middleware vendors enjoy their time in the halo.

UPDATE, Oct 16: SAP CEO Henning Kagermann said he is not considering a counter offer for BEA, or any other company in a market that had “so much overlap” with SAP.

Worried by a fall in SAP’s share price since it launched a $6.8bn bid for Business Objects, Kagermann told the Financial Times that Oracle’s bid for BEA showed the companies were on different paths.

“We bought a company that complements our product line in a fast-growing market in which SAP is not market leader. We believe in complementary deals. We’re not interested in a classic consolidating of markets.”

Kagermann was anxious to calm investors’ fears that the Business Object deal showed it had abandoned its faith in organic growth and would now match Oracle on the takeover trail.

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