Oracle Corporation (NASDAQ:ORCL) today announced that it had delivered a letter to the board of directors of BEA Systems, Inc. (NASDAQ:BEAS).
The text of the letter follows:
October 25, 2007
Board of Directors
BEA Systems, Inc.
2315 North First Street
San Jose, CA 95131
Dear Members of the Board of Directors:
We believe that your counterproposal at $21 per share price is an impossibly high price for Oracle or any other potential acquirer. At $21 per share, the BEA board is asking for an 80% premium to BEA's stock price before the appearance of activist shareholders who are pushing the BEA Board to sell the company. The $21 per share price is a multiple of nearly eleven times BEA's last twelve months reported maintenance revenues. Nobody would seriously consider paying that kind of multiple for a software company with shrinking new license sales.
Furthermore, no other company has come forward to bid for BEA. Our proposal at $17 per share is the only offer. Apparently no other companies think that BEA is worth $17 per share, let alone $21 per share. Accordingly, we repeat our proposal to purchase BEA at $17 per share, a price that we are unwilling to increase. We do not believe BEA is worth more than that and we have an obligation to our own shareholders to exercise price discipline when evaluating acquisition opportunities.
We urge the BEA Board to put our $17 per share proposal to the shareholders for a vote. But if BEA's objective is to remain independent, then the $21 per share counterproposal is a perfect strategy because there are no bidders above $17 per share. If the BEA board continues to refuse to execute an acquisition agreement at $17 per share, our proposal will expire at 5 p.m., PDT, on Sunday, October 28, 2007, at which time Oracle will move on and evaluate other potential acquisitions.
/s/ Charles Phillips