FT.com / Companies / IT - Oracle walks away from BEA offer

FT.com / Companies / IT - Oracle walks away from BEA offer

Oracle walks away from BEA offer
By Richard Waters in San Francisco

Published: October 29 2007 00:45 | Last updated: October 29 2007 00:45

Oracle late on Sunday carried through on its threat to drop its $6.7bn offer for BEA Systems, though it did not rule out renewing its bid if shareholders succeed in pressuring the embattled software company to put itself up for sale.

It also issued a thinly veiled invitation to Carl Icahn, the activist shareholder who has become one of BEA’s biggest shareholders, to launch a proxy battle to force BEA’s hand.

“If the BEA shareholders are unhappy with the behaviour of the board, it is up to those shareholders, not Oracle, to take the appropriate action,” it said in a statement late on Sunday.

The comments came minutes after 5pm California time, the deadline set by Oracle for BEA to agree to its $17-a-share offer. BEA had already said it planned to let the deadline lapse, and that it would not consider a sale for less than $21 a share.

Oracle said that its offer had now expired, and that BEA shareholders should “not assume” it would renew the bid at that price in the future. “Over time many things can change,” the company said. “BEA’s business might materially weaken, the stock market can fall further from its recent record highs, or Oracle may have committed its capital elsewhere.”

Mr Icahn called on BEA’s board late last week to start negotiations with Oracle rather than let it walk away. He has also indicated he will take legal action to prevent BEA from taking any actions that would make it less vulnerable to a takeover.

“They are vulnerable to a proxy fight and they know it,” said one shareholder, who said that the BEA board was likely to accept a bid below the $21 it has held out for.

However, any attempt to force BEA’s hand is likely to be complicated by the investigation that is currently underway into its accounting for stock options. While that review continues, the company is not able to file accounts or hold a shareholding meeting, effectively putting it into limbo.

Copyright The Financial Times Limited 2007