Icahn Calls for Sale of BEA Systems
Sunday, September 23rd, 200709/15/2007 Billionaire activist investor Carl Icahn on Friday called for the sale of BEA Systems Inc., a business software maker whose stock price has sagged with the growth in open-source software and under pressure from larger competitors such as IBM Corp. and Oracle Corp.
In a filing with the Securities and Exchange Commission, Icahn reported owning 33.4 million of BEA’s shares, or an 8.5 percent stake in the San Jose-based company.
Icahn’s stake was worth $426.5 million based on the stock price before the filing. After the filing, BEA shares rose 49 cents, or nearly 4 percent, to close at $13.25 Friday.
BEA’s stock has declined steadily over the past year. Before Icahn’s filing, the stock price was down 24 percent since its 52-week high last October, a drop that wiped out about $1.5 billion in shareholder wealth.
In the filing, Icahn blamed consolidation in the technology industry for hurting the business of independent software companies like BEA.
He said BEA’s stock is undervalued and a sale would help drive up the price if BEA were bolstered by the resources of a larger company that could boost sales while stripping out duplicate costs.
Icahn said he intends to meet with BEA’s management to discuss possibly selling the company and might seek to nominate people to the board of directors.