Oracle Corp. said Wednesday it agreed to buy BEA Systems Inc. for about 8.5 billion, after earlier offers from Oracle were spurned as being too low.
Redwood City-based Oracle (NASDAQ:ORCL) and San Jose-based software maker BEA (NASDAQ:BEAS) said the deal is for 19.375 per share of BEA outstanding shares, a 24 percent premium to Tuesday's close price of 15.58.
BEA's stock soared on news of the deal, closing the day up more than 18 percent at 18.46 after going as high as 18.60. Oracle's stock closed the day at 21.91, up about 3 percent.
BEA Systems last year turned down a 6.7 billion offer from Oracle, about 17 a share, saying it undervalued the company.
Speaking to analysts at a briefing in November, Oracle CEO Larry Ellison said that after Oracle did more investigation into BEA, it decided that "clearly the 17 price seems too high right now."
But now he sounds happy paying about 14 percent more than last year's offer price.
"The addition of BEA products and technology will significantly enhance and extend Oracle's Fusion middleware software suite," said Ellison. "Oracle Fusion middleware has an open "hot-pluggable" architecture that allows customers the option of coupling BEA's WebLogic Java Server to virtually all the components of the Fusion software suite. That's just one example of how customers can choose among Oracle and BEA middleware products, knowing that those products will gracefully interoperate and be supported for years to come."
BEA Chairman and CEO Alfred Chuang said that over the past several months, the company has "reviewed various ways to maximize stockholder value, including engaging in discussions with third parties about a possible sale of the company. This transaction is the culmination of that diligent and thoughtful process, and we believe it is in the best interests of our shareholders."
The board BEA Systems has unanimously approved the transaction. It is anticipated to close by mid-2008, subject to BEA stockholder approval, certain regulatory approvals and customary closing conditions.
