Oracle finally bags BEA

After snubbing the IT giant's earlier advances, the software and integration vendor accepts takeover at almost a $4 per share premium.

Oracle and BEA finally ended their wrangle over valuations to agree terms of acquisition with an offer valued at around $8.5 billion (4.3 billion).

Oracle will acquire all outstanding shares of BEA for $19.375 (9.895) per share in cash or $7.2 billion net of BEA's cash on hand of $1.3 billion.

Oracle first launched its bid for the business software and integration systems vendor in October last year with a $6.6 billion (3.3 billion) offer. Even then this $17 per share offer put a 25 per cent premium on BEA's closing $13.62 share, price the day of the offer.

BEA's share price spiked during the initial takeover speculation, losing ground as it rejected the initial and its own subsequent price tag of $8.3 billion later that month was snubbed by Oracle as "impossibly high". BEA's share price closed at $15.58 yesterday, before the final takeover news broke.

Oracle chief executive, Larry Ellison said the addition of BEA products and technology would significantly enhance and extend Oracle's Fusion middleware software suite.

"Oracle Fusion middleware has an open "hot-pluggable" architecture that allows customers the option of coupling BEA's WebLogic Java Server to virtually all the components of the Fusion software suite,' he suggested, promising that their products would " gracefully interoperate and be supported for years to come".

Charles Phillips, Oracle president added that the deal would accelerate the adoption of Java-based middleware technologies and service oriented architectures (SOA).

Subject to BEA stockholder approval, the acquisition is anticipated to close by mid-2008, subject to regulatory approvals. The deal will be accretive to Oracle's earnings by at least 1-2 cents on a non-GAAP basis in its first full year after closing.

In other news, Oracle late yesterday released 26 fixes in its quarterly critical patch update (CPU), as previewed last week.

Oracle said nine repaired flaws that were remotely exploitable, while five out of the six Oracle Application Server vulnerabilities could be exploited with no need for a password or username, just network access. While three of the seven e-business suite and application flaws and one out of the four PeopleSoft Enterprise PeopleTools flaws patched shared the Application Server network vulnerability.

There were also eight database-related patches and one for its Collaboration Suite. In its advisory, Oracle advised administrators to apply the patches as quickly as possible.

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