Oracle has announced its intention to acquire BEA Systems in a letter of proposal to the Board of Directors of BEA.
The deal is a suggested $17 per share in cash, which is a 25 percent premium over Oct. 11’s closing price of $13.62.
“We have made a serious proposal including a substantial premium for BEA,” said Oracle President Charles Phillips in the letter. “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.”
Phillips said Oracle will protect customer investment in BEA’s products by “supporting those customers and products for years to come.” He cited Oracle’s support of PeopleSoft and Siebel following their acquisition by Oracle.
He continued in the statement, “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.”
Greg Carlow, managing director of United Kingdom-based Oracle VAR Repton, said it would be a good move for Oracle. “This gives Oracle a play in the enterprise control software space, and could lay out a battlefield with IBM and its Tivoli software and HP with its OpenView technology.
“If the software controls the enterprise, it doesn’t matter where the tin is from, so BEA was a logical play for Oracle. This is an indication that Oracle will be competing in the longer-term battles.”
He said from a channel perspective, it would be a wait-and-see scenario. “It will be interesting to see if Oracle unites the two channels and what the joint technology outcome for the channel sell will be.”