Oracle pulls bid for BEA; proxy battle may follow

Oracle Corp. withdrew a $6.7-billion bid for business software maker BEA Systems Inc. on Sunday, setting the stage for a proxy battle between activist investor Carl Icahn and the BEA board.

The world’s No. 3 software maker pulled the $17-a-share bid after a deadline lapsed with no sign that BEA had budged from its view that it was worth $21 a share, or $8.2 billion.

“BEA shareholders should not assume that Oracle will renew its $17-per-share offer in the future,” Oracle said in a statement.

“Over time many things can change: BEA’s business might materially weaken, the stock market can fall further from its recent record highs, or Oracle may have committed its capital elsewhere.”

Observers are refocusing their attention on a possible proxy battle between billionaire investor Icahn, who is BEA’s biggest shareholder with a 15% stake, and the BEA board.

On Friday, Icahn called on BEA to auction itself off, saying shareholders should be allowed to vote on the highest bid -- even if that is from Oracle.