BEA, Oracle Trade Offers, Barbs

In a letter to BEA late Tuesday night, Oracle President Charles Phillips shot down BEA's demand that Oracle pay $21 per share to take it over. Oracle is offering $17.

The total value of BEA's demand is $8.2 billion. The total value of Oracle's offer is about $6.6 billion.

"We believe that your counterproposal at $21 per share price is an impossibly high price for Oracle or any other potential acquirer," Phillips wrote. "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. . . Nobody would seriously consider paying that kind of multiple for a software company with shrinking new license sales."

Phillips also called attention to the fact that, despite speculation, no other potential suitor has stepped forward to make a public bid for BEA.

"Apparently no other companies think that BEA is worth $17 per share, let alone $21 per share," Phillips wrote. Oracle has set an Oct. 28 deadline for serious negotiations to begin, or it would pull its offer from the table.

William Klein, a BEA vice president, wrote back to Phillips Friday morning that the company believed the deal, then, was dead.

"As fiduciaries, our Board cannot endorse a proposal that it has concluded significantly undervalues BEA," Klein wrote. "We therefore assume that your proposal will expire on October 28."

In trading ahead of the stock market's opening bell on Friday, shares of BEA dropped 98 cents per share to $16.55, below Oracle's current offering price.