BEA Systems: Oracle withdraws buyout offer; Icahn to sue the board

29 October 2007

In a statement, Oracle has said BEA shareholders should not assume that it would renew its $17 a share offer in the future.

The amorphous "shareholders" in the Oracle statement is actually directed at just one of them - BEA''s largest shareholder, Carl Icahn. Before the deadline had passed, Icahn on Friday, 26 October, demanded that BEA allow shareholders to vote on the highest bid by any suitor. Otherwise, he warned, a potential lawsuit and proxy fight may be on the cards.

(See:Icahn calls for auction of BEA as Oracle bid expiry looms)

The billionaire investor and shareholder activist, who holds more than 58 million shares of BEA stock, had initially agreed with BEA''s board that the middleware enterprise software maker was more valuable than Oracle''s offer of $17 a share. But he changed his mind later, seeing the board''s intransigence.

Icahn has accused BEA''s board of trying "to find ways to derail a sale and maintain your control of the company". BEA''s board has repeatedly rejected Oracle''s bid, demanding $21 per share or $8.3 billion, a price Oracle said was "impossibly high".

Icahn seemed to agree with Oracle. His letter states, "In particular I view your public declaration of a $21 per share ''take it or leave it'' price as a management entrenchment tactic, not a negotiating technique."