Oracle, the world's third-biggest software maker, has agreed to buy BEA Systems for $8.5 billion (€5.8 billion) in cash after a three-month fight which saw the database giant capitulating to the board's demands for a higher price.
BEA investors will receive $19.38 a share, 24 per cent more than Tuesday's closing price. BEA, the maker of software that lets programs share information, rejected an unsolicited bid of $17 from the company in October and asked for $21, a figure that Oracle called "impossibly high".
The purchase, Oracle's largest in three years, brings chief executive Larry Ellison's acquisitions to more than $33 billion and marks a reversal from last month, when Oracle said a friendly deal couldn't be done with the current board. Mr Ellison is counting on BEA to help him maintain the pace of sales amid slowing growth in technology spending.
"It is a lot more than what they initially offered," said Edward Lewis, a partner at Atlantic Equities. "BEA managing to flush out a higher offer from Oracle is obviously proof that their strategy worked."
The deal is a victory for billionaire investor activist Carl Icahn, who pressed BEA's board to agree to a takeover. Mr Icahn, the company's biggest shareholder with about a 13 per cent stake, had sued demanding that shareholders gain the right to vote in a sale.
Buying BEA will help Oracle challenge IBM for the market lead in middleware, which helps different types of programs share information.
Separately, Sun Microsystems has agreed to buy open source software company MySQL for about $1 billion. The deal lets Sun enter the $15 billion market for database software, challenging Oracle in its core market and adding a stream of service revenue.
Balderton Capital, one of whose partners is Irish executive Barry Maloney, had a 15 per cent stake in MySQL. Mr Maloney said he was "thrilled that Sun Microsystems recognised the value in MySQL".
Sun is bolstering its software unit to offer more pieces that businesses need to build web-based systems, chief executive Jonathan Schwartz said.
Mr Schwartz, who became CEO in April 2006, restored Sun to profit after five years of losses by cutting jobs and adding new products. - (Bloomberg)
