No Surprise: Oracle Locks Up BEA Systems

When it’s in a hunt, Oracle always manages to capture its target. The news Jan. 16 that the Redwood City, Calif.-based enterprise systems maker had finally locked up its latest quarry, BEA Systems, should come as no surprise to anybody who knows President & CEO Larry Ellison and his modus operandi.

It’s really very simple: When he wants something, he’s able to sit tight and wait for it. He’s been waiting nearly two years for this competitor to become available, and now he’s just gained a good piece of the Java-based app server market with one big buy.

Oracle will pay $19.375 per share for BEA, some 14 percent above the $17 per share it offered in October but not as much as the $21 BEA had previously demanded. Oracle’s total spend: about $7.2 billion, after banking the $1.3 billion in cash BEA currently has on hand.

“It’s a fair price. It’s a good deal for Oracle. It’s a good deal for BEA,” said Trip Chowdhry, analyst at Global Equities Research. Choudhry has doubled back; he originally told eWEEK in August that he thought Oracle had dropped out of the bidding in favor of HP.

In The Station’s discussion of this expected buyout last August, Bob Stimson, a Boston-based financial analyst who follows both Oracle and BEA for WR Hambrecht + Co., told eWEEK correctly that ” … Oracle could pay from up to $17 or $18 per share, but that would assume that Oracle could get a lot of cost synergies at a 20 to 25 percent expense reduction.”

We’re sure Ellison & Co. have worked out the numbers, and we’re also fairly sure they all are favorable to Oracle.