Oracle bids for BEA as Icahn awaits offers
( Reuters ) - Oracle Corp said on Friday it made an unsolicited $6.7 billion bid for software maker BEA Systems Inc, which has been under pressure from activist investor Carl Icahn to put itself up for sale.
BEA said the offer was too low. The company's shares jumped as much as 33 percent to $18.15, more than $1 above Oracle's offer of $17 per share.
"BEA is worth substantially more," BEA's board said in a letter to Oracle.
Icahn said he was glad Oracle made the bid, adding that he expected higher offers to emerge from Oracle rivals, naming International Business Machines Corp and Hewlett-Packard Co as potential bidders.
The industry has been consolidating over the past few years amid pressure to boost profit margins by cutting costs. Oracle, IBM and Hewlett-Packard have been among the most aggressive buyers.
When Icahn first disclosed that he had invested in BEA and called for the company to be put up for sale, he cited this trend and said the mid-sized software maker would never be able to generate the profit margins and returns for shareholders that bigger rivals could.
BEA sells software that helps business computer systems communicate with each other. It is called "middleware" because it works in between other types of software, sitting in the middle of computer systems.
Businesses use BEA software to control various tasks that manage the inner workings of large computer systems, including communications and program development. Its top rivals in that market are Microsoft Corp, IBM and Oracle.