November 15, 2007 2:13 am

Ellison warns BEA on possible future bid

Any future Oracle takeover bid for BEA Systems will be for less than the $7bn it offered last month, Larry Ellison, Oracle’s chief executive officer, warned on Wednesday night.

The blunt threat, issued at Oracle’s annual financial analyst meeting in San Francisco, marked a characteristically sharp public response in what is shaping up to become the latest in a string of drawn-out takeover sagas mounted by Mr Ellison.

It echoed his unusual tactic of lowering Oracle’s bid at one point during its heated bid for rival PeopleSoft, although Oracle eventually paid a considerably higher price to win over the company’s board.

“If we made another offer [for BEA], the price would be lower,” Mr Ellison said at Oracle’s annual analyst meeting on Wednesday. Pointing to the recent retreat in technology stocks, he added: “Clearly the $17 price seems too high now.”

While Oracle’s own shares were hit hard last week in a broader downturn in tech stocks, BEA’s shares have remained largely unchanged as investors have anticipated a renewed bid from Oracle.

BEA has rejected Mr Ellison’s unsolicited approach on the grounds that it undervalued the company, though it has said it is open to an offer at an appropriate price.

While he did not reveal whether Oracle would renew its approach to BEA, the Oracle CEO said: “It looks like noone [else] is going to buy BEA. We were the only buyer then.”

BEA, which has also been caught in an options backdating investigation, said that it would file its overdue accounts on Thursday. It has claimed in recent weeks that the additional financial information in those accounts would help to support its argument that Oracle’s $17 offer undervalued the company.

While suggesting that he would only offer a lower price in future, Mr Ellison also said that a deal at the original price would be very beneficial to Oracle shareholders. “At $17 a share, it was a highly accretive transaction,” he said.

The comments about BEA came as Mr Ellison faced a spate of questions from financial analysts about whether Oracle would be able to continue its recent record of rapid acquisition-fuelled growth.

“We think we have found some very attractive targets, and we think we can do it for a while longer,” Mr Ellison said.

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