BEA Partners: Are You Scared Of Oracle?

demanding $8.2 billion shooting down

The result of my dial-a-thon? Silence. Crickets chirping. Not one VAR returned my call. Cold-calling is always a hit-and-miss tactic for finding talkative sources, but I can't remember the last time I made so many calls without connecting with even one single solution provider willing to chat.

So what's up, partners? Is the idea of an Oracle takeover too scary to talk about?

Officially, Oracle's bid is dead; the company ostentatiously walked away when its expiration deadline passed on Sunday. In reality, Oracle's past history suggests it's playing hardball and will continue behind-the-scenes talks with BEA or launch another bid once it's softened the company up to its offering price. Remember, Oracle is the company that bid $26 per share for PeopleSoft, then submitted two lower bids (for $21 per share and then $24 per share) when PeopleSoft failed to jump at its initial offer. (It eventually paid $26.50 a share to close the deal.) Like a cat, Oracle likes to knock its prey around for a bit to stun it before going in for the kill.

One way or another, BEA is inevitably going to be bought. Its customer base and application server technology are attractive assets, and activist shareholder Carl Icahn has made BEA his new pet project. Icahn's modus operandi is to load up on shares in companies he sees as acquisition bait and aggressively push for a sale. Now BEA's largest shareholder, with a nearly 15 percent stake in the company, Icahn fired off a letter on Friday with scathing criticism of BEA's board and demands for an auction-style sale of the company, with shareholders -- not the board -- voting on whether to accept or reject bids.

Mired in an options-accounting mess, behind on its financial filings, and under pressure from a major shareholder bent on pulling profits out of his BEA speculationm, the elements add up to a situation in which BEA-aligned solution providers should brace themselves for partnership with a new BEA owner.