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ORACLE BEA - Oracle Pounces!

"Oracle is prepared to proceed immediately," says official letter to the Board of Directors of BEA

(October 12, 2007) - "Oracle is prepared to proceed immediately," says the official letter delivered today to the Board of Directors of BEA by Oracle, which is proposing to acquire BEA for $17.00 per share in cash - a 25% premium over yesterday's closing price of $13.62. "We have made a serious proposal including a substantial premium for BEA," said Oracle President Charles Phillips.

"We believe our all cash offer provides the best value for BEA's shareholders and the best home for BEA's employees and customers," Phillips continued. "This proposal is the culmination of repeated conversations with BEA's management over the last several years. We look forward to completing a friendly transaction as soon as possible."

Oracle has been eyeing BEA since at least 2004 and analysts had been predicting since the summer that either private equity firms or Oracle were almost certain to pull the trigger and make an acquisition.

In July for example Credit Suisse analyst Jason Maynard wrote in a research note:

"Over the course of the last few months we believe BEA is feeling more pressure to aggressively pursue a path that maximizes shareholder value," Phillips said this morning in a statement.

"We think the poor execution over the last few years has created a baseline of frustration," he continued, "and the recent April Q1 disappointment was the spark that set a series of events in motion that should lead to a positive outcome for shareholders. While management may still be hesitant about selling the business, it’s our opinion that they are rapidly losing the ability to influence that decision."

"We intend to protect the investment customers have made in BEA's products by supporting those customers and products for years to come," Phillips added. "Our continuing support commitment has been amply demonstrated with all of our previous acquisitions, including PeopleSoft and Siebel. BEA will be no different. The acquisition of BEA by Oracle will enable an increase in engineering resources that will in-turn accelerate the development of our world-class suite of middleware. Both Oracle and BEA customers will benefit from this increase in engineering investment as they migrate to modern SOA technologies."

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