Middleware firm kicks off bidding war

BEA has turned down Oracle's $6.7bn acquisition offer, claiming that it undervalues the middleware maker.

"It is apparent to our board [...] that BEA is worth substantially more to Oracle, to others and, importantly, to our shareholders than the price indicated in your letter," BEA president William Klein wrote in a letter addressed at Oracle co-president Charles Philips.

Oracle is offering a 25 per cent premium over BEA's closing stock price as of Thursday. Klein however argued that the current valuation doesn't properly reflect the firm's value.

"We believe that the absence of current financial information in the public markets limits investor visibility into our performance," adding that BEA would disclose additional information in the near future.

BEA's stock price rose nearly 40 per cent on Friday, indicating that investors expect Oracle to further raise its offer.

BEA specializes in middleware applications. It's flagship product is the Aqualogic application server, and the firm also has been making a big push into service oriented architectures.

Oracle has a set of competing middleware applications. Klein cautioned that the acquisition talks would have to remain brief to minimize uncertainty with customers. He also warned that he could only supply limited competitive information.