Dodging Oracle's unsolicited buyout offer, BEA buys itself another month to find a buyer and prove its worth.
On the ropes from Oracle's recent unsolicited buyout offer, BEA Systems has bought itself a little more time to find another buyer. The company announced Dec. 20 that its 2007 annual shareholder meeting has been rescheduled to spring 2008, giving BEA another 30 days to get its financial house in order.
BEA said in a statement that the meeting, originally scheduled for Valentine's Day of 2008, has been rescheduled to March 18. The extra month will give BEA time to report its financial results for its fourth quarter and fiscal year ending Jan. 31 and stave off a proxy battle with its largest-and most outspoken-shareholder, Carl Icahn.
On Oct. 12, Oracle announced its unsolicited bid for BEA, offering to pay $17 per share for the company-a 25 percent premium over BEA's closing price just prior to the offer. BEA, which had been unable to state its earnings since 2006 because of a stock option snafu, declined Oracle's offer, stating that the company is worth more.
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the unlikely alliance between Carl Icahn and Oracle.
At one point BEA countered Oracle's bid with its own asking price of $21 per share, a price that Oracle did not accept. In the meanwhile, Icahn, as the largest shareholder, continued to pressure BEA to sell to Oracle, threatening a proxy battle and lobbing a lawsuit to force BEA to set a date for its 2007 annual shareholder's meeting, where the proxy battle would commence.
BEA said in its Dec. 20 statement that the company has reached a settlement with Icahn in setting the March 18 meeting date, though it's still not clear whether Icahn intends to back off on his proxy battle threats.
BEA will have its work cut out for it in the first months of 2008. Not only does the company need to prove that its worth is beyond Oracle's initial asking price, but it has to find a suitable buyer and stave off any additional threats from Icahn. BEA said in its statement that shareholders will have until March 7 to propose director nominees and bring proposals to the shareholder meeting. Shareholders of record as of Jan. 22 will be able to vote at the meeting.
According to media reports, Oracle disclosed during its Dec. 21 earnings call that it had renewed its efforts to negotiate a sale with BEA, but to no avail. "Over the last few weeks we have been in contact with their bankers and lawyers, and as a result of those discussions, we've concluded that no friendly deal can be done with the current BEA board at a price and terms acceptable to Oracle," said Chief Financial Officer Safra Catz during Oracle's earnings call.
While BEA could well be in negotiations with another potential buyer-analysts have pointed to SAP, Hewlett-Packard and IBM as likely suitors-none have been forthcoming to date.
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