News
Ellison: Oracle Unlikely To Pursue BEA
- By The Associated Press
- November 15, 2007
Oracle Corp. Chief Executive Larry Ellison told analysts Wednesday that the business software maker is more likely to pursue other takeover targets instead of renewing its recent $6.7 billion bid for rival BEA Systems Inc.
Ellison's remarks echoed statements that Oracle issued late last month when it withdrew an $17-per-share offer after BEA's board demanded $21 per share, or about $8.2 billion.
"If we made another offer, the price would be lower" than Oracle's original bid, Ellison said during a late afternoon meeting with analysts.
Despite the impasse, many analysts still believe San Jose-based BEA ultimately will be snapped up by Redwood Shores-based Oracle once the two sides can agree on a suitable price.
Investors apparently haven't abandoned hope that BEA will be able to fetch a better offer from Oracle or another bidder. BEA shares rose 51 cents to $17.40 Wednesday, then relinquished 39 cents in after-hours trading.
Oracle has already spent more than $25 billion during the past three years buying a long list of smaller competitors like PeopleSoft, Siebel Systems and Hyperion Solutions.
Although Oracle has already grabbed the top targets on its shopping list, Ellison indicated the company isn't ready to put its wallet away yet. "We are now looking at our second favorite stocks and we have found some attractive" candidates, he said.
Oracle could become even more aggressive if a weakening economy drives down the price of tech stocks and creates more bargains, Ellison said.
Concerns about a slowdown on technology spending already has hurt many stocks in the sector, including Oracle's. The company's shares fell 34 cents to $20.18 Wednesday, leaving the stock with a 9 percent loss in value during the past week.
BEA is one of the leading makers of "middleware," the computer coding that helps business applications interact more smoothly with databases.
The company has become more vulnerable to a takeover as it struggled with sliding sales and accounting headaches stemming from its past mishandling of employee stock options.
The muddled finances have prevented BEA from filing its quarterly earnings for more than a year, a factor that has prevented investors from getting a firm grasp on the company's performance.
A clearer picture could start to emerge Thursday when the company expects to file financial statements dating back to July 2006. BEA is also scheduled to release its results for its fiscal third quarter ending in October.
The company began sharing some of its confidential information last week with billionaire investor Carl Icahn, who has been using his 13.2 percent stake in BEA to pressure the board into a sale. The board is trying to show Icahn why it believes BEA shouldn't be sold for anything less than $8.2 billion.
With all the takeover talk unnerving its roughly 3,800 employees, BEA recently threw a financial security blanket over virtually its entire work force, according to Securities and Exchange Commission documents filed Wednesday.
BEA last week guaranteed severance packages that will provide three months to 12 months of pay to full-time and most part-time employees who are fired within a year after a takeover.
The severance protection conceivably could make BEA a less attractive takeover target by adding to an acquirer's expenses after a sale is completed.