BEA Awaits Sweeter Deal

SAN FRANCISCO -- Oracle(ORCL) tried to pull off a shotgun wedding by disclosing Friday that it had made an acquisition offer to BEA Systems(BEAS).

But Oracle's apparent hope that investors would rush BEA to the altar has yet to materialize.

Shares in middleware developer BEA, which has been revisiting its earnings reports from the past several years, have been stalled this year by the company's limbo status. And as BEA prepared to wrap up financial restatements, Oracle jump-started what still may become a bidding war, trying to force BEA's hand while the stock still looked cheap.

Once BEA's filings are up to date, investors will have a clearer picture of its earnings outlook. They would likely have bid up the stock even without an initial offer from Oracle.

That BEA continues to trade above $18 suggests that the market views Oracle's offer of $17 a share as too little, too early. Oracle has a history of raising its initial offer prices when it encounters resistance from its target, as it did in the acquisition of PeopleSoft.

BEA was miffed by Oracle's early disclosure of initial negotiations. Late Friday, BEA sent a letter to Oracle President Charles Phillips clarifying what it called Oracle's misstatements. "We did not agree to your proposal that the process result in a definitive agreement by Monday," wrote William Klein, vice president of business planning and development for BEA.

But he also said that the company is not ruling out a friendly merger.