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January 16, 2008, 7:44 am

BEA gets the best of Oracle

Oracle (ORCL) and BEA Systems (BEAS) have made up and tied the knot. On Wednesday, Oracle ended a months-long battle with BEA over terms of a buyout and said it would pay $19.38 a share in cash, or $8.5 billion, for BEA. That’s a 24 percent premium to Tuesday’s closing price. ”The addition of BEA products and technology will significantly enhance and extend Oracle’s Fusion middleware software suite,” said Oracle CEO Larry Ellison in a statement.

Of course, Ellison tried to steal BEA this summer with an offer at $17 a share - a deal that won the backing of big BEA shareholder Carl Icahn. BEA responded that it wanted to sell at $21, prompting Icahn to scoff that the company was simply pursuing “a management entrenchment tactic, not a negotiating technique.” That seemed like an odd comment at the time, given Icahn’s history of bullying executives at companies he takes a stake in. But now, with a deal closer to management’s $21 than Ellison’s original $17, it’s clear BEA chief Alfred Chuang managed to get shareholders a better deal - something Icahn surely applauds.

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Filed under bea, icahn, oracle, yelling

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BEA’s great tech development minds will be buried under King Larry’s rule..worse still is that the BEA sales force will bullied into Oracle’s way of doing business. That is not good for BEA customers and BEA salesfolks..let the job search begin

Posted By CDR Rumson, NJ : January 17, 2008 4:33 am

I beg to differ with Raman. People I personally know from Oracle has said that Oracle’s Fusion and App Server is not even close to what BEA has to offer even two years back. And this same sentiment is also heard from customers in the IT industry.

Oracle’s only reason to purchase BEA is to be able to deliver the fusion promise. Otherwise, why the need to spend a whooping 8.5 billion?

Posted By Ken, KL, Malaysia : January 17, 2008 1:46 am

And BEA is now considerably weaker tied into Oracle. Hopefully Oracle doesn’t screw with WebLogic too much.

Posted By Joshua Smith, Salt Lake City, UT : January 16, 2008 11:03 am

Other than retaining market share through buyout of BEA, I do not see how BEA would add technologically to Oracle’s product lineup. As it is Oracle’s Application server and Fusion is already at par or better than BEA products.

On the other hand Oracle may endup increasing its debt burden, especially at a time when US and world’s emerging economies are showing signs of having tanked and may be heading downwards for a while atleast.

Posted By Raman, Plano TX : January 16, 2008 9:41 am

I doubt this is happy ending for BEA customers as they are the ones who will suffer the most.

Posted By Peter Kohls, Austin : January 16, 2008 9:32 am

I am glad this deal has a happy ending. Oracle is much stronger now with BEA.

Posted By Bhaskar Gorti, Redwood Shores CA : January 16, 2008 8:15 am

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Colin Barr covers business and finance for Fortune.com. Previously he was an editor at TheStreet.com and author of the weekly Five Dumbest Things on Wall Street column, and an editor at Dow Jones Newswires.

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