BEA not threatened by Oracle bid

NEW YORK: BEA Systems Inc. said that it is not a takeover target, even though Oracle has expressed interest in acquiring the company, noting that it is making plans for small acquisitions.

Oracle, which has launched a hostile takeover of rival PeopleSoft Inc., said in January it was interested in BEA, but the price was too high. The company would not comment further.

"We would prefer to be a stand-alone company," Chief Technology Officer Scott Dietzen told Reuters. "We don't really help with Oracle's No. 1 and No. 2 priorities."

Dietzen said he thinks Oracle's top priorities are expanding its sales of database software and software that helps businesses make purchase decisions. BEA makes software that helps companies run their applications on the Web.

Nevertheless, BEA, which is locked in an intense rivalry with computing giant International Business Machines Corp., admits it cannot afford a price war if a company tries to force an acquisition on it by undercutting its sales.

"We do feel IBM can discount more deeply than we can because they have other ways to make money," said Dietzen, adding customers would still prefer BEA's products because they are integrated better and generally require less hardware.

BEA has promised parachute payments to its top executives. They will receive two years' annual base salary and the highest annual bonus if they are fired due to a "change in control" of the company.

BEA, which said the practice is standard, said in a filing on Monday that it has added a protection provision on its executives' stock options if an all-cash takeover happens.

The San Jose, California company, which has grown by buying more than 40 companies, said it will continue to make deals. But instead of launching huge takeovers, it would rather buy small companies.

"I basically carried around a shopping list of companies that we want to acquire," he said. "For the most part, we do our acquisitions around small, boutique start-ups that have gifted teams and superior technology that we can integrate in our product offerings."

As of Oct. 31, BEA has cash and short-term investments was $1.4 billion.

Reuters