Oracle has openly mocked middleware provider BEA Systems Inc.'s $8.3 billion buyout proposal, saying that a price of $21 per share is "impossibly high."
"The $21 per share price is a multiple of nearly 11 times BEA's last 12 months reported maintenance revenues," Oracle president Charles Phillips wrote in an open letter to BEA's board of directors on Thursday. "Nobody would seriously consider paying that kind of multiple for a software company with shrinking new license sales."
Phillips went on to say that Oracle is sticking with its original cash offer of $17 per share -- a price that amounts to about $6.66 billion.
"Our proposal at $17 per share is the only offer," Phillips wrote. "Apparently no other companies think that BEA is worth $17 per share, let alone $21 per share. Accordingly, we repeat our proposal to purchase BEA at $17 per share, a price that we are unwilling to increase."
Phillips said the $17 per share offer will expire on Sunday at 5 p.m. pacific, "at which time Oracle will move on and evaluate other potential acquisitions."
Oracle made its initial bid for BEA about two weeks ago. BEA flatly rejected the offer, but indicted a willingness to negotiate further. BEA then countered with the $8.3 billion proposal earlier this week.
Oracle's first offer for BEA came on the heels of news that Oracle's chief rival, German enterprise resource planning heavyweight SAP, had cut a deal to by business intelligence software giant Business Objects for $6.8 billion.
Oracle itself has been on an acquisition tear over the last few years, buying up over 30 companies, including customer relationship management software mainstays PeopleSoft Corp. and Siebel Systems Inc. Just this week, Oracle inked a deal to buy performance management software maker Interlace Systems for an undisclosed sum.
Experts say an Oracle buyout of BEA would most likely make Oracle the industry leader in enterprise infrastructure software.
"If Oracle does successfully acquire BEA, what they're going to have is probably the best [or] one of the best high end middleware platforms. [One that] financial service customers, [telecommunications] customers, public sector and those that are building a lot of custom applications have depended on. These include systems integrators who have built their future programs and future solution sets the BEA platform," Ray Wang, principal analyst with Cambridge, Mass.-based Forrester Research Inc., said in