Oracle agrees to buy BEA

January 16, 2008 7:21:41 AM PST
Business software maker Oracle Corp. said Wednesday it agreed to buy BEA Systems Inc. for about $7.85 billion, a compromise price that ends a months-long dispute over the value of the software company.

Oracle agreed to pay $19.375 per share for BEA, which makes "middleware," the computer coding that helps business applications interact more smoothly with databases. The price is based on 405.3 million outstanding BEA shares as of Nov. 30. Oracle put the total price of the deal at $8.5 billion.

The price represents a premium of 24 percent over BEA's closing share price of $15.58 on Tuesday.

The offer for the San Jose company is much richer than one from Oracle it rebuffed in October. That overture was for $17 a share, valuing the company at about $6.7 billion. At the time, BEA's board demanded a price of $21 per share. The directors unanimously approved the latest offer.

Oracle said it expects BEA to add 1 cent to 2 cents per share to adjusted earnings in the first year after the deal closes. That requires stockholder and regulatory approval.

Oracle CEO Larry Ellison has already spent more than $25 billion during the past three years buying a long list of smaller competitors like PeopleSoft, Siebel Systems and Hyperion Solutions.