Oracle bids $6.7 billion to acquire BEA Systems

SAN FRANCISCO - Oracle Corp. has offered $6.7 billion to buy BEA Systems Inc. in its latest bid to trump SAP AG and International Business Machines Corp. in an increasingly intense business-software battle.

Oracle announced its $17-per-share cash offer yesterday, one day after BEA rejected it as inadequate, according to a letter BEA released a few hours after Oracle's revelation catapulted its stock to a new 52-week high.

BEA makes "middleware," products that help software applications run more smoothly on top of databases. Oracle makes business-management software.

Oracle's bid represented a 25 percent premium over BEA's closing stock price Thursday.

"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," William Klein, BEA's vice president of business planning and development, wrote in the rejection letter.

Industry analysts say BEA might be able to escape Oracle's clutches by finding a white knight. Activist investor Carl Icahn, who is using his 13.2 percent stake in BEA to push for a sale, told CNBC he believes other bids are likely.

SAP, IBM and Hewlett-Packard Co. are considered the most probable candidates to vie for BEA. SAP's headquarters for the Americas is in Newtown Square, where it has 2,000 employees.

SAP, IBM and HP all declined to comment on the speculation.

BEA shares soared above Oracle's bid yesterday, reflecting investors' expectations that other suitors will emerge or that Oracle will sweeten the pot. The stock rose $5.20, or 38 percent, to $18.82 yesterday after reaching a new 52-week high of $18.94 earlier in the day.

BEA's cold shoulder seems unlikely to deter Oracle, whose chief executive officer, Larry Ellison, has shown he doesn't back off easily once he is on the takeover prowl.

Oracle shares fell 2 cents yesterday to close at $22.44.