Oracle’s recent hostile takeover bid for enterprise infrastructure software company BEA triggered speculation that SAP and other big players may enter the fray and engage in a Retek-style bidding war. Well, that doesn’t seem to be happening. The clock ran out on Oracle’s offer and nobody else has stepped up to the plate.

In fact, SAP CEO Henning Kagermann went on the record to restate that SAP has little interest in BEA just earlier today. What now? Since BEA insists it is worth at least $21 per share (compared to the $17 offered by Oracle), it better show some seriously improved numbers in the next few quarters. It’s a risky gambit, and the market response has been rather brutal. It seems neither technical analysts nor Wall Street are taking a kind view to BEA’s bold stance.

Carl Icahn, who owns some 13% of BEA, is already suing the board for not taking Oracle up on the offer. SOA blogger Miko Matsumura predicts BEA will also face a new “wait and see” attitude in its potential customers, making it even harder to salvage the sinking ship. Investment researcher Georges Yared went so far as to call BEA “…an arrogant company led by an arrogant management team.”

Ouch. The consensus seems to be that Oracle is BEA’s only hope, where Oracle is in a position to patiently wait for BEA to come crawling back on its knees… Or, if BEA is stubborn, the company can slowly crumble away into oblivion. Either way, SAP obviously intends to steer clear of whatever ripples may be caused by the BEA drama. In this situation, that’s probably a wise move.

Matt Danielsson
Editor

The recent news of Oracle’s bid to acquire troubled enterprise infrastructure software company BEA took an interesting turn today. Despite Oracle offering $17 per share, some 25% over market price before the deal was announced, BEA has now responded to the Redwood Shores giant saying that’s nowhere near fair valuation. From BEA’s official response:

“…It is apparent to our Board […] that BEA is worth substantially more to Oracle, to others and, importantly, to our shareholders than the price indicated in your letter […] We believe that the absence of current financial information in the public markets limits investor visibility into our performance. We expect that this will be corrected in the near future.”

Furthermore, BEA is not about to get lured into any kind of shenanigans that might endanger its competitiveness.

“…As we have made clear to you in previous discussions, we are very sensitive to the fact that Oracle is a direct competitor of BEA. Therefore, the Board cannot consider any process which is long in duration, open-ended in nature, or would divulge competitively sensitive information which could materially harm our business and our shareholders’ interests.”

An interesting turn of events, indeed. It seems the BEA folks are quite confident, and the market is responding; as of this writing, BEA’s stock price is approaching $19 a share, a neat one-day bump of about 40%. Still, Goldman Sachs analysts Sarah Friar and Derek Bingham believe Oracle will be game for a price tag of $20 or more per share.

It’s an all-cash deal, so the question is: Will Oracle dig that deep into the coffers just to get BEA in the bag? And if they do, how will this impact SAP and other competitors? Better yet, will SAP, IBM, HP and other key players engage in a bidding war now that there’s blood in the water? Stay tuned as news editor Jon Franke digs deeper into this over the weekend for an in-depth analysis early next week.

Matt Danielsson
Editor