Oracle Wants to Acquire BEA Systems (ORCL, BEAS)

Oracle Corporation (NASDAQ:ORCL) has delivered a letter to the Board of Directors of BEA Systems, Inc. (NASDAQ:BEAS) on October 9 whereby Oracle proposed to acquire BEA for $17.00 per share in cash.  Oracle is prepared to proceed immediately to a process that leads to a definitive agreement.

Carl Icahn just got vindicated for his persistence.  The $17.00 pershare offer is a 25% premium over yesterday’s closing price.  But whatis interesting is that a "letter being sent" is no assurance that adeal will be approved by management at BEA Systems.  The 52-week high is $16.77.  If managementwants to hold out, they’ll probably be able to.  Shares are indicatednorth of $16.00 in very early indications.

Oracle President Charles Phillips: "We have made a serious proposal including a substantial premium for BEA. We believe our all cash offer provides the best value for BEA’s shareholders and the best home for BEA’s employees and customers. This proposal is 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.  We intend to protect the investment customers have made in BEA’s products by supporting those customers and products for years to come.  Our continuing support commitment has been amply demonstrated with all of our previous acquisitions, including PeopleSoft and Siebel. BEA will be no different. The acquisition of BEA by Oracle will enable an increase in engineering resources that will in-turn accelerate the development of our world-class suite of middleware. Both Oracle and BEA customers will benefit from this increase in engineering investment as they migrate to modern SOA technologies."

• Any closer to an offer?
• Still playing hide and seek;
• Carl Icahn might not win.

Jon C. Ogg
October 12, 2007

Jon Ogg produces the 24/7 Wall St. Special Situation Investing Newsletter; he does not own securities in the companies he covers.