Oracle Corp, the business software maker, said on Friday it had made an unsolicited bid to acquire rival BEA Systems for US$6.7 billion, an offer BEA executives rejected as too low.
BEA, a rival in the market for corporate software known as middleware, is being pressured to sell by its largest shareholder, investor Carl Icahn.
"BEA is worth substantially more to Oracle, to others and, importantly, to our shareholders," William Klein, BEA's vice president for business planning and development, said in a letter on Friday to Oracle president Charles Phillips Jr. Klein said the deal was complicated by BEA's internal investigation into stock option grants.
Icahn said in a statement he agreed that, at US$17 a share, the price was too low, but that he was "pleased" that Oracle had made an offer.
The bid came a few weeks after Icahn increased his ownership stake in BEA to 13.2 percent in an effort to force the company to seek a buyer. Consolidation in the industry, Icahn said, could place independent software vendors like BEA at a disadvantage and staying independent could severely damage shareholder value.
Icahn has threatened a proxy fight to win a seat on BEA's board.
Oracle's all-cash offer, made on Tuesday in a letter to BEA's board, was a 25 percent premium over BEA's closing price of US$13.62 on Thursday. On Friday, BEA shares rose US$5.20, to close at US$18.82.
"We believe our all-cash offer provides the best value for BEA's shareholders and the best home for BEA's employees and customers," Phillips wrote to BEA.
Oracle has shown a willingness in the past to raise offers and analysts expected it to do so again.
In 2003, Oracle made a US$16 per share bid for PeopleSoft and spent more than a year fighting an antitrust battle. In the end, Oracle paid US$26 a share.
Since then, the company has spent more than US$21 billion buying 33 software companies.
David Hilal, an analyst at Friedman Billings Ramsey, said that Oracle would ultimately prevail in acquiring BEA, if only because other possible suitors may be reluctant to get into a bidding war.
BEA, facing strong competition from both Oracle and IBM, has long been considered a takeover target in an industry that has been consolidating for several years.
But BEA executives have dismissed Oracle's repeated overtures, saying it could perform better independently.
Acquiring BEA would firmly establish Oracle as the dominant player in middleware -- software that gets its name from its role as a layer of programming code that resides between a company's database system and the payroll, resource management and supply chain systems that use the same data.
To many, Tatu City on the outskirts of Nairobi looks like a success. The first city entirely built by a private company to be operational in east Africa, with about 25,000 people living and working there, it accounts for about two-thirds of all foreign investment in Kenya. Its low-tax status has attracted more than 100 businesses including Heineken, coffee brand Dormans, and the biggest call-center and cold-chain transport firms in the region. However, to some local politicians, Tatu City has looked more like a target for extortion. A parade of governors have demanded land worth millions of dollars in exchange
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue jumped 48 percent last month, underscoring how electronics firms scrambled to acquire essential components before global tariffs took effect. The main chipmaker for Apple Inc and Nvidia Corp reported monthly sales of NT$349.6 billion (US$11.6 billion). That compares with the average analysts’ estimate for a 38 percent rise in second-quarter revenue. US President Donald Trump’s trade war is prompting economists to retool GDP forecasts worldwide, casting doubt over the outlook for everything from iPhone demand to computing and datacenter construction. However, TSMC — a barometer for global tech spending given its central role in the
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS