(Adds background, analyst comment, updates shares)
By Jim Finkle
BOSTON Oct 29 Software maker BEA Systems Inc's
BEAS.O board said on Monday it is holding out for a
$21-a-share takeover offer, or $8.2 billion in total, a day
after larger rival Oracle Corp ORCL.O withdrew its bid.
BEA reiterated its position after its biggest shareholder,
Carl Icahn, called for the business software maker to be put up
Oracle has been the only company to publicly offer for BEA,
but withdrew a $17-per-share bid on Sunday after BEA said it
was too low.
"We are prepared to authorize negotiations to sell the
company at a price of $21 per share," the BEA board said in a
letter to Icahn on Monday.
BEA shares rose as much as 3.4 percent to $17.06 on Nasdaq
on Monday, before ending the session unchanged from Friday's
Last week Oracle ruled out any action after Sunday, but in
withdrawing its bid it did not rule out the possibility of
another offer. "The BEA shareholders should not assume that
Oracle will renew its $17 per share offer in the future,"
Oracle said on Sunday.
WR Hambrecht analyst Robert Stimson said he was sure that
Oracle will be back, most likely with a tender offer directly
to shareholders if BEA's board does not accept an offer to the
liking of Oracle Chief Executive Larry Ellison.
"When Larry Ellison sets his mind to something, he won't
let it go," Stimson said. "They'll be back."
Analysts have said other possible bidders for BEA include
International Business Machines Corp (IBM.N) and
Hewlett-Packard Co (HPQ.N). Both companies have declined
Germany's SAP AG (SAPG.DE), another potential candidate,
has said it is not interested, and reiterated that on Monday.
All eyes are now on a possible proxy battle between the BEA
board and Icahn, who owns 15 percent of the company. The
billionaire investor wants shareholders to get a chance to vote
on the highest bid -- even if it is the $17 offer from Oracle.
Icahn has threatened to sue BEA as well as launch a proxy
battle for control of the company if its board does not let
shareholders decide BEA's fate.
BEA's software, known as middleware, helps connects
computer systems. It would complement Oracle's database
programs and business management software to help the company
better compete against SAP.
Talk of a BEA buyout began in August when Icahn said he had
begun acquiring shares in the business software maker and
called on its board to put the company up for sale.
Oracle, which has a market value of more than $100 billion,
had called BEA's $21 price "impossibly high," saying it was an
80 percent premium to BEA shares before activist shareholders
pushed for a sale.
BEA has not filed full financial results since the quarter
ended April 2006 as it is auditing its books after discovering
irregularities in stock options grants. BEA said its inability
to publish results meant it has not showed its full value.
Analysts say uncertainty over BEA's future could be
demoralizing for its salesforce. A weak quarterly report could
push BEA shares down, working to Oracle's advantage, Stimson
(Reporting by Jim Finkle, editing Derek Caney/Tim Dobbyn)