How Would Monsieur Ellison Like His BEA Served? Mixed in a Bucket With Oracle's Other Acquisitions?
Looks like we may be in for another PeopleSoft-esque takeover drama.
BEA Systems’ board formally rejected Oracle’s $17-per-share offer to acquire it last Friday, saying the company is trying to buy it on the cheap. “BEA is worth substantially more to Oracle, to others and importantly, to our shareholders than the price indicated in your letter,” William Klein, BEA’s vice-president of business planning and development, wrote to Oracle.
And by shareholders, Klein apparently meant billionaire investor Carl Icahn–who, though he’s been pushing for the company to sell itself, said in a statement that he agreed that, at $17 a share, the price was too low.
And perhaps it is. At this writing, BEA is trading well above $18, suggesting that Oracle’s offer of $17 a share is a tad anemic. And Oracle surely knows this as well as anyone. After all, this isn’t the first time it’s low-balled a potential acquisition. Oracle began its pursuit of PeopleSoft with a first stingy bid that it later sweetened. And like BEA, PeopleSoft spurned its advances, which in its case was not a winning strategy–because Oracle CEO Larry Ellison has the patience of the devil himself in these situations, especially when he can hurt a competitor’s business during takeover wrangling.
“This is very clearly thought out,” Ellison said after Oracle first besieged PeopleSoft. “I think we’re likely to be successful and we are very determined to see this through to the end. … With or without us, PeopleSoft can’t survive. They can’t compete in this business in the long term.”
Message to BEA: Like PeopleSoft, you will be assimilated. And, BEA’s Klein best be careful, lest he go out like former PeopleSoft CEO Craig Conway, of whom Ellison once said: “I think at one point, ‘Craigey’ thought I was going to shoot his dog, Bear. If Craigey and Bear were standing next to each other and I had one bullet, trust me, it wouldn’t be for the dog.”