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Oracle gives BEA until Sunday to consider offer

The offer will be withdrawn if BEA hasn't responded by the end of the week, according to the latest correspondence from Oracle.

By Maggie Holland, 24 Oct 2007 at 11:37

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Oracle has imposed a deadline of less than a week for BEA Systems to accept its $6.66 billion (£3.33 billion) acquisition bid and plans to retract the offer if its requests are not met.

However, BEA's initial response to Oracle's latest communication suggests that it is still unlikely to accept the deal unless the price tag changes.

BEA has previously rejected the company's unsolicited takeover bid, claiming that the proposed price undervalues its worth, but Oracle is now demanding that it put the offer to a shareholder vote and respond by this Sunday (28 October) or else it will pull out of the process completely.

In a letter delivered to the BEA board yesterday, Oracle's president Charles Phillips expressed his frustration at not having been able to reach an agreement with the company as yet.

"Last night we were told by Bill Klein, Vice President-Business Planning and Development (speaking on behalf of the board), that BEA's board again rejected our proposed price of $17 per share in cash. The board has refused to meet with us since we made our October 9th proposal," he said.

"Oracle urges the BEA board of directors to let BEA's shareholders decide: sign an acquisition agreement with Oracle and allow the shareholders to vote. Oracle believes that our $17 per share price is generous and there are no offers for BEA above $17 per share..."

Phillips' letter concluded: "Oracle has no interest in a long, drawn-out process to acquire BEA," he said. "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 p.m., PDT, on Sunday, October 28, 2007."

BEA's Klein issued a speedy response to Oracle's letter, stating that the board was "unanimous in its view that your unsolicited proposal to acquire BEA at $17 per share is not in the best interests of BEA shareholders," and noting that it maintains its position that it is aware it is worth much more than that to Oracle and others in the industry.

"Despite your statement that Oracle will withdraw its proposal, we simply cannot accept an offer that seriously undervalues BEA...." Klein's letter to Phillips stated.

"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."