Oracle makes a bid for BEA Systems

Oracle has made an offer to acquire middleware specialist BEA Systems for a price of $17 (£8.36) per share.

The proposed deal was delivered via letter to BEA's board of directors earlier this week. The $17 per share price represents a 25 per cent premium on yesterday's closing stock value of $13.62 (£6.70).

The proposed takeover is the result of discussions with BEA management that have taken place over the past few years, according to Oracle president Charles Phillips.

"We look forward to completing a friendly transaction as soon as possible," he said.

"We intend to protect the investment customers have made in BEA's products by supporting those customers and products for years to come.

"The acquisition of BEA by Oracle will enable an increase in engineering resources that will in turn accelerate the development of our world-class suite of middleware."

Oracle has waited for a position of strength before making the proposition, said Laurent Lachal, senior analyst at Ovum.

"Oracle has spent the past three years positioning itself aggressively against BEA on the basis of the integration between its database and application server, and an aggressive pricing strategy," he said.

“The decision to wait is costly. Had it acquired in 2004, as it was considering, it would have picked up BEA's stock at its lowest, down at nearly $6 a share. It is now more than twice that amount.”