Oracle Corp. said Friday it would buy software maker BEA Systems Inc. for more than $6.66 billion (EUR4.69 billion). If the deal is arranged Oracle will expand its product portfolio and better compete with chief rival SAP AG.
Oracle said it sent a letter earlier this week to BEA Systems' board offering $17 per share, a 25 percent premium over Thursday's closing price of $13.62.
BEA Systems had more than 392 million outstanding shares as of May 31, 2006. It has delayed numerous quarterly and annual filings since then.
"We have made a serious proposal including a substantial premium for BEA," said Oracle President Charles Phillips in a statement. "We believe our all-cash offer provides the best value for BEA Systems' shareholders and the best home for BEA's employees and customers."
A call to BEA for comment early Friday was not immediately returned.
BEA is under pressure from billionaire investor Carl Icahn to sell itself. Last week, he increased his stake in the company to 13.2 percent, or 51.8 million shares, from an 11 percent interest previously.
The company also faces pressure from larger competitors such as IBM Corp. as well as Oracle, which is based in Redwood Shores.
BEA makes software that supports business processes such as billing, supply chain management and securities trading, by communicating between those programs and back-end systems like databases.
Such "middleware" software has been in high demand as businesses move more of their tasks onto the Web, but competition has held down prices.
BEA is the latest takeover target for Oracle, which has snatched up more than 30 rival companies in the last three years under flamboyant Chief Executive Larry Ellison. The company is vying for market dominance with SAP, the leading seller of business applications software that helps companies manage their operations.
Since 2004, Oracle's market value has climbed by about $40 billion (EUR28.17 billion), or more than 50 percent, as it devours smaller companies.
Shares of San Jose, Calif.-based BEA Systems surged $4.34, or 31.9 percent, to $17.96 in premarket trading Friday. Oracle shares were down 8 cents at $22.38.