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ORACLE BEA - Forget $17, BEA Tells Oracle and Others It's Worth $21 a Share

"We simply cannot accept an offer that seriously undervalues BEA"

(October 25, 2007) - BEA's Board of Directors is unlikely to accept Oracle's offer of $17 a share by Sunday, when the Oracle-set deadline for acceptance expires. It says that it would only be willing to begin discussing a sale of the company if the offer price were $21 per share. BEA is maintaining its position already expressed, that "We simply cannot accept an offer that seriously undervalues BEA."

"Over the last several weeks," BEA's board wrote today in a statement released to the media, "Oracle has repeatedly asked us for the price at which we would be willing to begin negotiations, and the Board has concluded, after consultation with its financial advisor Goldman Sachs, that it is prepared to authorize negotiations with third parties including Oracle at a price of $21.00 per share."

The Board has authorized its legal counsel, Wachtell Lipton Rosen & Katz, to deliver today to any such third parties a draft merger agreement that it is prepared to sign "that will be in customary form and provide for an appropriately high degree of certainty of closing," the statement continues.

About Oracle the statement is plain: "We continue to believe that Oracle's unsolicited proposal to acquire BEA at $17.00 per share significantly undervalues BEA, and is therefore not in the best interests of BEA shareholders. Accordingly, we will continue to vigorously oppose a sale to Oracle at $17.00 per share ."

That ends Round One of the bidding process which Oracle launched when it wrote the following letter on Friday, October 12, 2007:

Dear Members of the BEA Systems 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

It will now be up to Oracle to make the next move. Or HP, or...

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