M&A activity continued its steady pace led by two billion-dollar tech acquisitions and a host of smaller deals, but investors were cautious, leading to a down market. The DOW closed down 34.95, 0.28%, at 12,466.16. Meanwhile, the Nasdaq declined 23.00, or 0.95%, to 2394.59.
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Headlining the dealmaking is Oracle Corp.'s $8.5 billion acquisition of BEA Systems Inc. The offer is a premium of roughly 24.4% from BEA's closing price Tuesday of $15.58. Oracle's offer trumps an earlier unsolicited $6.7 billion or $17 per share bid in October. But when BEA deemed it "unacceptable,'' Ellison said he would not negotiate. Oracle has spent more than $25 billion in M&A deals for nearly 40 companies over the last couple of years.
Meanwhile, Sun agreed to acquire open-source software developer MySQL AB in a deal valued at $1 billion. Sun will pay $800 million in cash and assume $200 million in options. With the deal, Sun is moving to reaffirm "its role as the largest commercial open-source contributor," and break into the $15 billion database market, The Deal's Carolyn Murphy writes.
Some stocks in smaller-valuation dealmaking finished in positive territory such as:
- Hospice operator Odyssey HealthCare Inc. [ODSY] agreed to buy VistaCare Inc. [VSTA] for $147.1 million. Both company's shares finished up. Odyssey plans to fund the transaction with $30 million of its own cash and a funded commitment of $150 million from GE Capital Corp., which includes a five-year $30 million revolving credit facility and a six-year $120 million term loan. VistaCare has been struggling since its debut as a public company in December 2002.
- Regal Entertainment Croup [RGC] saw a modest gain following its late Tuesday announcement that it had acquired Consolidated Theatres mgmt. LLC for approximately $210 million in cash. Regal chairman and CEO Mike Campbell said the deal would be accretive to cash flows and earnings and said the companies expect to close the deal in the first half of 2008.
- Cox Radio Inc. [CXR], which has exercised an option to acquire five radio stations for $60 million, also was in the green gaining over 5%. The actual price is less the amount Cox has already paid on a $12 million option, according to The Deal's senior writer Richard Morgan. WNGC-FM, WGMG-FM, WPUP-FM, WGAU-AM and WRFC-AM, which all serve Athens, Ga., will be acquired from Paul Stone: Southern Broadcasting of Athens Inc., Southern Broadcasting of Pensacola Inc; and New Broadcast Investment Properties Inc.
Elsewhere, after posting a smaller-than-expected loss from its subprime bets, J.P. Morgan Chase & Co. [JPM] also said due to the current market conditions it would be more acquisitive of either a "company or individual assets in the near future." The statement will likely flame the rumors of the much-talked-about merger with Washington Mutual Corp. - Gerald Magpily
TheDeal.com: Oracle finally wins BEA
TheDeal.com: Sun Micro picks up MySQL
TheDeal.com: Odyssey to buy VistaCare
TheDeal.com: Regal buys Consolidated
Tech Confidential: Sun plunks down $1B to buy open-source database specialist MySQL
Tech Confidential: Oracle gets BEA for $19.38 per share
