The management and board of BEA Systems (BEAS) are boobs of the first order. Oracle (ORCL) offered $17 a share for the company when it was trading below $14. The BEAS shares had not been at $17 since 2002.
The reaction from the BEAS board was that the company was worth $21. The number does not appear to have a rational basis or justification. But, if wishes were horses all the beggars would ride.
Oracle has now come back to BEAS with a message. It follows weeks without any other bidder emerging for the company. Oracle say that, if it makes a bid, it will be below $17. “If we made another offer [for BEA], the price would be lower,” Larry Ellison, the company’s CEO said at Oracle’s annual analyst meeting on Wednesday. Pointing to the recent retreat in technology stocks, he added: “Clearly the $17 price seems too high now," reports the FT.
BEAS has no leverage. It should beg for the $17 and take it. At least its shareholders would get about what the company trades for now.
Douglas A. McIntyre
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