Oracle Corporation (Nasdaq:ORCL) said Friday morning that it has offered $17 per share to buy BEA Systems Inc. (Nasdaq:BEAS). BEA Systems has also been in the news of late because Carl Icahn has just recently raised his position in the company. Icahn now owns over 11% of the company. Icahn has been outspoken in his belief that BEA should sell itself to create value for shareholders. Icahn has said that he believes the company and its innovative technology could be very beneficial to another larger company.
BEAS is surging this morning after the news of this Oracle bid, trading at $18.04, $1.04 above the offer amount. Investors are clearly speculating that Oracle will have to raise its offer price, or another company may outbid Oracle to take BEA Systems. With the spike in BEAS shares just a week after Icahn reported his increased stake, Icahn clearly is sitting very pretty.
This is just another in the line of Oracle acquisitions, engineered by CEO Larry Ellison. In 2005 Oracle bought Peoplesoft, and in 2006 Oracle bought Siebel Systems.
Oracle says that this bid was, "the culmination of repeated conversations with BEA’s management over the last several years.” Based on the amount of BEAS shares outstanding, Oracle's offer adds up to $6.7 billion.
Time will tell if this is a bid that will be accepted quickly or could turn into a drawn out hostile takeover situation, but Oracle will certainly do everything it can to make the deal go through, and Carl Icahn will likely pressure BEA management to accept the deal.
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