Oracle has angrily refused to up its $6.7bn hostile takeover bid for BEA Systems, despite BEA saying it would be happy to sell up for $8.2bn.
BEA’s $21-per-share counter-offer is an impossibly high price for Oracle or any other potential acquirer, Oracle said in a statement late yesterday.
The rejection came just hours after BEA made its offer, saying its board was prepared to authorize negotiations with third parties including Oracle at a price of $21.00 per share.
The company stuck to its story that it believes Oracle’s $17-per-share bid significantly undervalues BEA, and is therefore not in the best interests of BEA shareholders.
We will continue to vigorously oppose a sale to Oracle at $17.00 per share, the company said in a statement yesterday morning.
BEA backed its proposal by claiming market leadership in enterprise infrastructure software, a deep and diverse customer base counting 75% of the Global 500, and what it termed an exceptionally strong balance sheet of over $1 billion in cash and no debt.
And it claimed that its $21 valuation was based on its reading of analyst estimates as to the value of previous acquisitions by Oracle and other players in the software industry.
The tone of Oracle’s response to this offer could be described as shocked and appalled.
We believe that your counterproposal at $21 per share price is an impossibly high price for Oracle or any other potential acquirer, Oracle president Charles Phillips wrote to BEA.
At $21 per share, the BEA board is asking for an 80% premium to BEA’s stock price before the appearance of activist shareholders who are pushing the BEA Board to sell the company, he wrote.
The activist shareholder is Carl Icahn, who anticipated BEA would soon be acquired and disclosed a sizable interest in August this year. He now owns about 13% of the company, and is its largest shareholder.
Statements made by Icahn since Oracle disclosed its $17 offer two weeks ago have indicated that he, like BEA, wants to sell, but at a higher price.
But Oracle apparently does not want to play ball. It has set a Sunday deadline for BEA’s board to accept the $17, or, assuming the company is not bluffing, it will drop the bid.
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, Phillips wrote. We urge the BEA Board to put our $17 per share proposal to the shareholders for a vote.