Sun rallies investors despite possible Oracle blocker
Golden parachutes readied
The wheels are rolling on Oracle's $5.6bn proposed purchase of Sun Microsystems, despite the prospect of a legal challenge later this month.
Sun has named July 16 as the date for the company's stockholders to attend a special meeting at its Santa Clara, California campus to vote on what it's optimistically called a "merger."
In a letter to stockholders, Sun's board called Oracle's proposal a "fair" offer that's in the best interests of Sun and stockholders. It called on stockholders to vote for the motion.
We'll see what the court has to say whether it thinks the deal fair or not.
Less than a month before the planned July meeting, a Santa Clara court will hear three class action brought against Sun and its chairman and co-founder Scott McNealy that claim Oracle's offer is unfair and inadequate. They allege a breach of fiduciary duty. Sun and McNealy have so far not responded to the complaints.
Oracle has offered $9.50 cash for each Sun share, the price of which has generally trended down since the spring and summer of 2007. Shares reached a high of $24.36 during Sun's fiscal fourth quarter of April - June 07 and have hit a high of $9.36 during the current fourth-quarter.
According to a recent Sun filing, chief executive Jonathan Schwartz tried - and failed - to haggle up Oracle president Safra Catz from the $9.50 proposal.
Sun, meanwhile, has estimated what senior management's severance package will look like.
Schwartz will get a $12m package that includes $9m in pay; McNealy $9.5m including $7.5m in pay; executive vice president of systems John Fowler $3.3m, including $2.3m pay; executive vice president for application platform software Anil Gadre $2.7m, including $2.08m in pay; and chief technology officer and executive vice president of research and development Greg Papadopoulos $3.7m, including $2.8m in pay.
These severance benefits will come into effect should they leave Sun either voluntarily or involuntarily - read resign, fired, or laid off - 12 months after the deal.
Java users don't get a golden parachute from the Oracle, but they can - and are - looking for ways to avoid becoming beholden to a single company for their entire middleware, business applications, and hardware. They are investigating Red Hat and JBoss.
Listen to what Oracle's acquisition of Sun means to Java users and Oracle customers in The Scoop, from Australia's MIS Financial Review. Reg software editor Gavin Clarke joins show-host Mark Jones, Unico CTO Peter Evans-Greenwood, and Enterprise Java user group president Rob Janson to discuss a software deal that quickly mushroomed into a bid for the whole of Sun. The Scoop is available here.
Sponsored: Flash storage buyer's guide