BEA accepts sweetened Oracle offer

By Jim Finkle

BOSTON (Reuters) - Oracle Corp (ORCL.O: Quote, Profile, Research, Stock Buzz), the world's third-largest software maker, won a three-month-long campaign to buy BEA Systems Inc BEAS.O by raising its bid for the company by 14 percent to $8.5 billion.

Icahn and BEA's board initially rejected Oracle, saying it undervalued the company, but no other buyers emerged even as BEA's investment bank, Goldman Sachs, solicited bids from other software makers.

BEA's largest shareholder, activist investor Carl Icahn, said he helped broker the deal over the weekend, bringing the two sides together in a bid to resolve one of last year's highest-profile corporate takeover battles. The companies announced on Wednesday that they have reached a deal.

"The two sides were not talking to each other...They were like oil and water," Icahn, who owns nearly 13 percent of BEA, told Reuters in an interview. "I was very instrumental."

The billionaire investor said the key negotiations occurred on Sunday afternoon and continued overnight, adding that much progress was made during halftime of the playoff football game between the New York Giants and Dallas Cowboys.

The price that BEA finally agreed to, $19.375 per share in cash, is a compromise between the $17 that Oracle offered in October and the $21 that BEA had demanded.

"It's a fair price," said Trip Chowdhry, analyst at Global Equities Research.

Shares of BEA rose 18.8 percent to $18.51 on the Nasdaq, while Oracle shares rose 2.72 percent to $21.89.