SAP Watch

Oct 29 2007   7:33PM GMT

BEA bidding war? Not for SAP

JackDanahy Jack Danahy Profile: JackDanahy

Oracle’s recent hostile takeover bid for enterprise infrastructure software company BEA triggered speculation that SAP and other big players may enter the fray and engage in a Retek-style bidding war. Well, that doesn’t seem to be happening. The clock ran out on Oracle’s offer and nobody else has stepped up to the plate.

In fact, SAP CEO Henning Kagermann went on the record to restate that SAP has little interest in BEA just earlier today. What now? Since BEA insists it is worth at least $21 per share (compared to the $17 offered by Oracle), it better show some seriously improved numbers in the next few quarters. It’s a risky gambit, and the market response has been rather brutal. It seems neither technical analysts nor Wall Street are taking a kind view to BEA’s bold stance.

Carl Icahn, who owns some 13% of BEA, is already suing the board for not taking Oracle up on the offer. SOA blogger Miko Matsumura predicts BEA will also face a new “wait and see” attitude in its potential customers, making it even harder to salvage the sinking ship. Investment researcher Georges Yared went so far as to call BEA “…an arrogant company led by an arrogant management team.”

Ouch. The consensus seems to be that Oracle is BEA’s only hope, where Oracle is in a position to patiently wait for BEA to come crawling back on its knees… Or, if BEA is stubborn, the company can slowly crumble away into oblivion. Either way, SAP obviously intends to steer clear of whatever ripples may be caused by the BEA drama. In this situation, that’s probably a wise move.

Matt Danielsson

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