Icahn Sues BEA to Force Vote on Offer MARKETPLACE By Bloomberg

Oct 29, 12:34 PM

Current Headlines: By Jonathan Thaw

The billionaire investor Carl Icahn sued BEA Systems, the software maker that spurned a $6.7 billion offer from Oracle, demanding that the company hold an annual meeting and allow shareholders to vote on a sale.

Icahn, BEA's largest shareholder, said Friday that the company should put itself up for auction. The lawsuit asks for BEA, which is seeking an offer of more than $8 billion, to hold an annual meeting by Nov. 30.

"They should have a fair auction process and let the best bid go to the shareholders, and not do anything to thwart that process," Icahn said Friday.

The lawsuit, along with a letter Icahn sent to BEA's board, stepped up pressure on the company to accept Oracle's offer or find a higher bid. BEA's software license sales fell 11 percent in the six months ended July 31. The company is counting on its profitable software-maintenance fees to lure suitors.

Icahn said the lawsuit is designed to prevent BEA from taking any action that may derail a sale, such as issuing stock or selling assets.

The company's board repeated Friday that it would not accept Oracle's $17-a-share offer, calling the bid "unacceptable." BEA, which is based in San Jose, California, said that it would agree to $21 a share, a price Oracle called "unacceptably high."

BEA shares fell $1.03, or 5.9 percent, to $16.50 Friday on the Nasdaq.

In the letter, Icahn said BEA's counteroffer price was a "management entrenchment tactic, not a negotiating technique." The company is at a "critical juncture" with a "holdover" board, he said.

Buying BEA would help Oracle, which is based in Redwood City, California, challenge International Business Machines for the lead in the market for so-called middleware - software that helps different types of programs share information. The Oracle chief executive, Larry Ellison, said last month that he aimed to "beat IBM" in middleware sales.

Originally published by Bloomberg News.

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