Oracle snubs BEA's $8.3bn price tag

BEA has finally given Oracle what it was asking for by issuing a public statement saying it will consider acquisition bids of $8.3 billion from the latter and from other third parties who might be interested.

But Oracle has already responded to BEA's public statement, which asks for $21 a share, saying the new price is "impossibly high" and that it will not budge from its offer of $17 a share, which remains on the table only until Sunday.

"We continue to believe that Oracle's unsolicited proposal to acquire BEA at $17.00 per share significantly undervalues BEA, and is therefore not in the best interests of BEA shareholders. Accordingly, we will continue to vigorously oppose a sale to Oracle at $17.00 per share," BEA said in a statement.

"...Based on analyst estimates of synergies in prior acquisitions by Oracle and other software consolidators, the Board believes Oracle or other third parties could achieve earnings accretion in a BEA acquisition at levels well in excess of $21.00 per share."

Oracle's speedy response from president

Charles Phillips cut straight to the point, with the new asking price being quickly dismissed.

"...The $21 per share price is a multiple of nearly eleven times BEA's last twelve months reported maintenance revenues. Nobody would seriously consider paying that kind of multiple for a software company with shrinking new license sales," his letter to BEA's board said.

"Furthermore, no other company has come forward to bid for BEA. Our proposal at $17 per share is the only offer. Apparently no other companies think that BEA is worth $17 per share, let alone $21 per share. Accordingly, we repeat our proposal to purchase BEA at $17 per share, a price that we are unwilling to increase. We do not believe BEA is worth more than that and we have an obligation to our own shareholders to exercise price discipline when evaluating acquisition opportunities."

Phillips' letter concluded by reiterating that the company's original offer will expire on 28 October and that, if BEA has not accepted the bid by then, it will "move on and evaluate other potential acquisitions".

Email to a friend

Print this page

Social Bookmark this article: What is this?

Digg

Delicious

Reddit

StumbleUpon

Slashdot

Google

Facebook