Icahn blasts BEA board as Oracle walks away
'This will hurt you more than it hurts me'
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Oracle let its $17 per share offer for BEA lapse yesterday, but activist investor Carl Icahn has demanded the middleware firm put the offer to shareholders anyway.
Icahn, BEA's biggest shareholder, said in an open letter: "I am sure that the BEA board would agree with me that it would be desirable not to have to put BEA through a disruptive proxy fight, a possible consent solicitation and a lawsuit."
Presumably, he'll make sure that is just what happens, unless BEA commits to his two suggestions.
Firstly, he says, the board should "allow its shareholders to decide the fate of BEA by conducting an auction sale process and allowing the shareholders to accept or reject the proposal made by the highest bidder".
He added, ominously: "BEA should not allow the stalking horse bid from Oracle to disappear (failure to take the Oracle bid as a stalking horse would be a grave dereliction of your fiduciary duty in my view)."
Icahn also warned: "BEA should agree not to take any action that would dilute voting by issuing stock, entrench management or derail a potential sale of BEA."
Just to be on the safe side, Icahn has kicked off a lawsuit demanding that BEA hold its annual shareholder meeting before engaging in any "scorched earth" policies to stymie a hostile bid.
BEA's management seemed intent on frustrating any takeover of the company, said Icahn, and he warned: "You should have no doubt that I intend to hold each of you personally responsible to act on behalf of BEA's shareholders in full compliance with the high standards that your fiduciary duties require, especially in light of your past record."
While Oracle is publicly walking away from the bid, observers reckon it is still intent on swallowing BEA. Icahn's very public intervention may ensure a more focused BEA board next time round. ®
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COMMENTS
Public Companies
This is what public companies are all about. The majority shareholders have purchased the right to direct corporate policies and decisions. If the majority (even if it's one person) wants something to happen, that's what happens (majority shareholders actually own a company, so it's theres to do with as they please). If companies don't want that kind of "interference" they have no business placing a majority of their company up for sale.
Something stinks in the Shares of Denmark...
Yet another reason I hate the so-called "capitalist free-market" of the US. On one side, you have hungry conglomerates doing either "hostile-takeover then shutdown competitors" or "eat your competitors so they are you" tactics. As an example of the first one I call CompUSA vs. Computer City.
On the other side, we have greedy investors shouting "SHOW ME THE MONEY!" and selling out to said conglomos, only because its a get-rich-quicker solution than actually helping said company. Its sad enough to see a lot of start-ups that are being made on the dream of "oooh soon MS, Oracle, IBM et al will buy me up!!!" without 'investors' trying to bully established biz to sell up.
Screw Icahn. Keep it up BEA ... and if they want to get sold but at a higher price, well, let them be.
What a crock..
Icahn is out to only line his own pockets.
He recently buys in to BEA knowing that if he gets a large enough position, he can try to bully it in to a sale. So he gets his quick profit in the name of "shareholder value".
But is his actions really in the shareholder's best interest?
Don't think so.
BEA isn't officially on the chopping block and the board most likely acted in the company's best interest. Icahn clearly isn't.
One has to ask if the SEC shouldn't be looking in to Icahn and any affiliation he may have we Oracle, or any of its board of directors...
On the surface, something smells, and I'm not in the state of Denmark, or a Shakespear play. .;-)
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