Oracle has offered $6.66bn cash for BEA Systems. It’s probably a relief to all concerned since it’s been a while in the offing and BEA has hardly proved the reluctant bride. But just to be certain, Oracle offered $17 per share, a 25% premium on last night's closing price.
However, shares rocketed in early trading to match the offer and were soon trading at $18. If accepted (is it even debatable?) this $6.6bn deal is a bigger beastie than Oracle’s $6bn acquisition of Siebel Systems in 2006.
Oracle’s closest rival, SAP, acquired Business Objects recently following Oracle’s earlier acquisition of Hyperion (plus Siebel, Peoplesoft, JD Edwards etc, etc.) SAP is widely believed now to be adopting a shadow-Oracle strategy, not initiating acquisitions but matching Oracle’s buying habits. So, hands up distressed middleware companies looking for a teutonic white knight.
Oracle delivered a letter making the offer to BEA’s board on 9 October. It says it is prepared to proceed immediately to a process that leads to a definitive agreement.
"We have made a serious proposal including a substantial premium for BEA," said Oracle's urbane president Charles Phillips.
"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."
Philips said Oracle intended to “protect the investment customers have made in BEA's products by supporting those customers and products for years to come."
CIOs twitching nervously at the fast-shrinking list of enterprise software vendors NOT owned by Oracle must be wondering where CEO Larry Ellison's fancy will turn next. Well, he's a software vendor on a mission... and whatever you're using could be top of his list.