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BEA, Oracle maintain their silence on takeover offer

At least publicly, the two companies have been in a holding pattern about Oracle's unsolicited proposal to buy BEA


Given the silence from the BEA Systems and Oracle camps early this week about Oracle's unsolicited proposal to buy its middleware rival, the community at large can only sit back and guess what might be the next scene in this drama.

The two companies have been keeping quiet since last Friday's blockbuster revelation that Oracle was seeking to acquire BEA for $17 per share, or about $6.7 billion. Both have spurned requests this week for media briefings to elaborate on the issue.

Undoubtedly, much is taking place behind the scenes, as aggressive Oracle seeks to add BEA to the impressive list of formerly independent companies it has acquired, which has included, among others, PeopleSoft and Siebel Systems. BEA, meanwhile, also has to be pondering its next step.

Officials at Sun Microsystems, which invented the Java platform that serves as the backbone of many BEA and Oracle products, seemed to be caught off-guard when asked about the proposed merger at a Sun event in San Francisco on Wednesday evening.

Chuckling, Rich Green, Sun executive vice president of software, suggested contacting Oracle CEO Larry Ellison about the matter. But when asked what impacts might be felt by the Java platform itself, Green did not see any negative effects.

"They're both Java supporters," Green said. "I think it's neutral to Java. I think it's just fine."

Sun's James Gosling, a founder of Java and chief technology officer for Sun's client software group, concurred. "They're both big supporters of Java. I don't think it's going to have much effect one way or the other," Gosling said.

Oracle has pledged to protect investments customers have made in BEA products. While Oracle's move has been characterized in some circles as a hostile takeover attempt, BEA's initial response merely said the Oracle offer undervalued the company.

Major BEA stockholder Carl Icahn has been prodding for a sale of BEA, prompting one BEA insider to suggest Icahn did not have enough shares and would have a hard time getting control of the BEA board of directors in order to make the sale happen. Now, Oracle has forced BEA's hand. If history is any indication, the sale is likely to happen. PeopleSoft opposed Oracle but eventually succumbed.

"We certainly saw how persistent Oracle was in chasing PeopleSoft," said Dennis Callaghan, enterprise software analyst at the 451 Group, who expects the merger to be completed.

Options for BEA to resist Oracle may be limited. To take the company private and avoid a merger, BEA would need to find a private equity partner, Callaghan said. And then there is Icahn, owning a significant stake in the company and wanting the company sold.

Paul Krill is editor at large at InfoWorld.
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