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BEA gets feisty over Oracle takeover bid

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The war of words between BEA and Oracle is heating up following Oracle's offer to buy the world's second largest middleware provider for $6,7-billion – an offer it has already rejected as "too low".

In an initial letter sent to Oracle president Charles Phillips by BEA's vice-president for planning and development William Klein, the company acknowledged Oracle's interest in BEA, adding: "It is apparent to our Board, however, that BEA is worth substantially more to Oracle,to others and, importantly, to our shareholders than the price indicated in your letter. As we have indicated to you previously, we believe that the absence of current financial information in the public markets limits investor visibility into our performance. We expect that this will be corrected in the near future when we become current on our SEC filings, and can communicate more fully with the investment community.
"In the mean time, our Board would appreciate greater clarity about what you mean by 'proceed… to a process.' As we have made clear to you in previous discussions, we are very sensitive to the fact that Oracle is a direct competitor of BEA. Therefore, the Board cannot consider any process which is long in duration, open-ended in nature,or would divulge competitively sensitive information which could materially harm our business and our shareholders' interests."
In a later letter posted on BEA's website, saying it was responding to "erroneous information contained in a letter Oracle publicly released earlier", Klein comes across as a little more blunt.
"Dear Charles: Let me clarify your misunderstanding and set the record straight.
1) We did not agree to meet this morning to commence a process,and we did not agree to your proposal that the process result in a definitive agreement by Monday.
2) We did not say there is 'no process' with Oracle that would result in a friendly deal.
3) We did say that BEA is worth substantially more to Oracle, to others and, importantly, to BEA shareholders than is reflected by Oracle's $17 price. The trading market today validates our judgment.
4) We did say, and we will repeat here, that we will not engage in any process that would be open-ended or harmful to our shareholders' interest."
The latest exchange, certain analysts predict, could lead to the kind of hostile takeover bid reminiscent of Oracle's acquisition of Peoplesoft.