BEA Already At Premium To Offer (BEAS, ORCL)

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BEA Systems Inc. (NASDAQ:BEAS) is already trading north of the $17.00 cash buyout offer from Oracle (NASDAQ:ORCL).  Almost 30 million shares have already traded hands, and there is more than 30 minutes to the market open.  Oracle proposed to acquire BEA Systems for $17.00 per share in cash.   

Carl Icahn just got vindicated for his persistence.  The $17.00 pershare offer is a 25% premium over yesterday’s closing price.  But whatis interesting is that a "letter being sent" is no assurance that adeal will be approved by management at BEA Systems.  The 52-week high is $16.77.  Management can hold out here if they want, but at some point they’ll have to roll over if the deal gets too sweet. Pre-Market trading had shares up over the $16.00  level right after the offer was announced.  Shares are now trading right at $18.00, $1.00 above the buyout price.  Wall Street is thinking the offer will get bumped up, or maybe even that another suitor would step in.

Jon C. Ogg
October 12, 2007

Jon Ogg produces the 24/7 Wall St. Special Situation Investing Newsletter; he does not own securities in the companies he covers.