Oracle launches $6.66 billion takeover bid for BEA

Oracle has today confirmed it has made a $6.66 billion (£3.33 billion) offer to buy business software and integration systems vendor BEA.

The offer, delivered in a letter to the BEA board of directors on Tuesday, puts a premium of over 25 per cent on the vendor's closing share price yesterday of $13.62 (£6.70) with its $17 (£8.36) per share offer.

The letter indicated that Oracle is prepared to proceed immediately, but BEA has issued no public statement and declined to comment at the time of writing.

The announcement of the bid comes just days after Oracle's key rival SAP announced its planned takeover of Business Objects.

Oracle president Charles Phillips said the offer was 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 said.

He added that a commitment to support BEA's customers would be backed by the evidence of how it has handled previous acquisitions, including the likes of PeopleSoft and Siebel. "We intend to protect the investment customers have made in BEA's products by supporting those customers and products for years to come," Phillips said.

Oracle said the acquisition of BEA would enable an increase in engineering resources that will, in turn, accelerate the development of its middleware portfolio.

Neil Macehiter, service director of analyst Macehiter Ward-Dutton told IT PRO news of the offer was not surprising, as it could be seen as a continuation of Oracle's strategy to gain a greater share of key strategic markets and as part of the general industry move toward greater consolidation of smaller, best-of-breed players by the big infrastructure and application vendors.

"In this case it's not about Oracle plugging any technology gaps, but rather about their intention to grab market share and BEA's customer base." Although, he added: "BEA's legacy Tuxedo base and telecoms specialities are likely to be attractive to Oracle."

Macehiter pointed out that BEA has been struggling to maintain licence revenues these past couple of years, which have been outpaced by growth in support and maintenance.

"To a company like Oracle maintenance is key, while the premium of the offer may be attractive to BEA who would otherwise be looking for ways to grow its ability to compete with best-of-breed competitors like Tibco and Software AG."

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