Oracle Bids $6.7 Billion for BEA POSTED October 12, 2007 REDWOOD SHORES -- Oracle made an unsolicited offer to purchase BEA Systems for $17.00 per share in cash. The $17.00 per share offer is a 25% premium over Thursday's closing price of $13.62. BEA has rejected this offer as being too low as the stock closed Friday at $18.82 on news of the takeover, higher than Oracle's offering price. BEA Systems is headquartered in San Jose. The letter indicates that Oracle is prepared to proceed immediately to a process that leads to a definitive agreement. "We have made a serious proposal including a substantial premium for BEA," said Oracle President Charles Phillips. "We believe our all cash offer provides the best value for BEA's shareholders and the best home for BEA's employees and customers. This proposal is the culmination of repeated conversations with BEA's management over the last several years. We look forward to completing a friendly transaction as soon as possible." BEA Systems responded to Oracle with the following letter: ----- 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 ------ Oracle today also responded with its letter to BEA: ------ October 12, 2007 Board of Directors BEA Systems, Inc. 2315 North First Street San Jose, CA 95131 Dear Members of the Board of Directors: As discussed with your management team, Oracle remains available to discuss and complete a transaction quickly and efficiently. We believe that it is important to clarify the sequence of activities that have transpired over the past few days. Upon receipt of Bill Klein's letter dated October 11, I contacted him to address any process concerns. Bill and I agreed on an accelerated process that would be, by anyone's standard, "short in duration" and not "open-ended" and that would permit BEA to not "divulge competitively sensitive information." BEA's management agreed to meet this morning at 10:00am Pacific time to commence a process intended to result in the execution of definitive agreements before the open of business on Monday, October 15. Unfortunately, BEA cancelled the meeting late last night and declined our invitations to reschedule. In my subsequent discussions with Bill earlier today, I asked whether there was any process that BEA would prefer to follow to move towards a friendly transaction and was told that BEA had no such process in mind. We are available to proceed immediately with a process that would lead to a friendly transaction. In the meantime, we remain committed to our proposed price of $17.00 per share, provided that the BEA Board and management team do not institute any measures which reduce the value of the company or shift value from BEA's shareholders to the management team. Our proposed price is a substantial premium to an already-inflated stock price that reflected speculation of the potential sale of BEA and represents a more than 40% premium to BEA's stock price before the appearance of activist shareholders in mid-August of this year. Sincerely, ORACLE CORPORATION Charles Phillips President Return to SVDaily Home Page © Copyright SVDaily.com

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