Oracle eyes BEA Systems
12-10-2007
by Ciara O'Brien

Oracle has offered to buy software provider BEA Systems for more than USD6 billion, in a move that will intensify competition with rivals SAP and Microsoft.

On Friday, the software company confirmed that it delivered a letter to BEA Systems' board of directors on Tuesday, which offered USD17 per share for the company.

The acquisition will help Oracle boost its engineering resources and speed up the development of its middleware. Middleware is software which connects other software components or applications.

The firm has made a few acquisitions recently, mostly specialised software providers, to keep the pressure on with rival firms such as SAP and Microsoft. In fact, Oracle has made more than 30 acquisitions since 2005 and has already bought Hyperion Solutions this year, for USD3 billion. However, if successful, the BEA bid will be the biggest deal Oracle has struck since it bought Siebel Systems in 2006 for USD6 billion, and rival PeopleSoft in 2005 for a USD10.3 billion price tag.

Now that it's laid its cards on the table, Oracle appears to be anxious to get the deal resolved as quickly as possible. "We have made a serious proposal including a substantial premium for BEA," said Oracle president Charles Phillips. "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."

One of BEA Systems' biggest shareholders, billionaire investor Carl Icahn, who owns more than 13 percent of BEA, is reported to be keen for the firm to find a buyer.

Oracle is also trying to reassure BEA Systems customers, promising to support the products in the coming years. "Our continuing support commitment has been amply demonstrated with all of our previous acquisitions, including PeopleSoft and Siebel. BEA will be no different," said Phillips.

The deal intensifies competition with rival SAP, which recently announced it was to buy Business Objects for USD6.7 billion, giving the company access to software that tracks corporate databases.