BEA Systems (BEAS) Claimes It Is A Great Beauty

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BEA Systems (BEAS) want portential buyer Oracle (ORCL), which has offered $17 a share, to know that the company is worth $21.

Why is it worth so much? Because Goldman Sachs and the company’s board say it is. We continue to believe that Oracles unsolicited proposal to acquire BEA at $17.00 per share significantly undervalues BEA, and is therefore not in the best interests of BEA shareholders. Accordingly, we will continue to vigorously oppose a sale to Oracle at $17.00 per share. Over the last several weeks, Oracle has repeatedly asked us for the price at which we would be willing to begin negotiations, and the Board has concluded, after consultation with its financial advisor Goldman Sachs, that it is prepared to authorize negotiations with third parties including Oracle at a price of $21.00 per share."

It is, of course, a lot of posturing.

The stock has not traded at its current level since early 2002. It is not worth more than $15 to anyone other than Oracle which can fire most of the management and sales teams to save money and improve margins.

Douglas A. McIntyre