BEA responds to Oracle's overtures

Summary:BEA issued a statement regarding Oracle's unsolicited bid for $17 per share in cash. The gist of the letter is that the BEA thinks its worth more and doesn't want to give up any competitive information that would compromise its business versus Oracle in the marketplace.

BEA issued a statement regarding Oracle's unsolicited bid for $17 per share in cash. The gist of the letter is that the BEA thinks its worth more and doesn't want to give up any competitive information that would compromise its business versus Oracle in the marketplace. As a public company, BEA's numbers are not the issue, with exception of SEC filings and future quarters. Of course, many of the subtle nuances are not publicly available. If Oracle gets to the due diligence phase, there will be a high cost not if the transaction isn't completed. None of this is surprising and Oracle's patterns of negotiation in unsolicited bids are well documented

11 October 2007

Charles Phillips President

Oracle Corporation 500 Oracle Parkway Redwood Shores, CA 94065

Dear Charles -

Our Board of Directors acknowledges your interest in BEA as expressed in your letter of October 9, and is considering it in consultation with our advisors. 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.

I look forward to hearing from you.

Regards,

William Klein

BEA is being advised by Goldman, Sachs & Co. and Wachtell, Lipton, Rosen & Katz.

Topics: Enterprise Software, Banking, Legal, Oracle

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