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.
Three experts in the high technology industry have said that US President Donald Trump’s pledge to impose higher tariffs on Taiwanese semiconductors is part of an effort to force Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to the negotiating table. In a speech to Republicans on Jan. 27, Trump said he intends to impose tariffs on Taiwan to bring chip production to the US. “The incentive is going to be they’re not going to want to pay a 25, 50 or even a 100 percent tax,” he said. Darson Chiu (邱達生), an economics professor at Taichung-based Tunghai University and director-general of
‘LEGACY CHIPS’: Chinese companies have dramatically increased mature chip production capacity, but the West’s drive for secure supply chains offers a lifeline for Taiwan When Powerchip Technology Corp (力晶科技) entered a deal with the eastern Chinese city of Hefei in 2015 to set up a new chip foundry, it hoped the move would help provide better access to the promising Chinese market. However, nine years later, that Chinese foundry, Nexchip Semiconductor Corp (合晶集成), has become one of its biggest rivals in the legacy chip space, leveraging steep discounts after Beijing’s localization call forced Powerchip to give up the once-lucrative business making integrated circuits for Chinese flat panels. Nexchip is among Chinese foundries quickly winning market share in the crucial US$56.3 billion industry of so-called legacy
Hon Hai Precision Industry Co (鴻海精密) is reportedly making another pass at Nissan Motor Co, as the Japanese automaker's tie-up with Honda Motor Co falls apart. Nissan shares rose as much as 6 percent after Taiwan’s Central News Agency reported that Hon Hai chairman Young Liu (劉揚偉) instructed former Nissan executive Jun Seki to connect with French carmaker Renault SA, which holds about 36 percent of Nissan’s stock. Hon Hai, the Taiwanese iPhone-maker also known as Foxconn Technology Group (富士康科技集團), was exploring an investment or buyout of Nissan last year, but backed off in December after the Japanese carmaker penned a deal
WASHINGTON POLICY: Tariffs of 10 percent or more and other new costs are tipped to hit shipments of small parcels, cutting export growth by 1.3 percentage points The decision by US President Donald Trump to ban Chinese companies from using a US tariff loophole would hit tens of billions of dollars of trade and reduce China’s economic growth this year, according to new estimates by economists at Nomura Holdings Inc. According to Nomura’s estimates, last year companies such as Shein (希音) and PDD Holdings Inc’s (拼多多控股) Temu shipped US$46 billion of small parcels to the US to take advantage of the rule that allows items with a declared value under US$800 to enter the US tariff-free. Tariffs of 10 percent or more and other new costs would slash such