Activist Investor Icahn Calls for Sale of BEA Systems

Patti Domm

Billionaire investor Carl Icahn, who disclosed an 8.53% stake in BEA SystemsFriday, said he has asked for a meeting with BEA management and expects to meet with them.

"I didn't meet with them yet. We called them this morning and we expect to meet with them," Icahn told CNBC.

Carl Icahn
Shiho Fukada

Icahn, in a filing with the Securities and Exchange Commission, today said a strategic buyer would maximize the value of its shares and that he might seek to nominate directors to the software makers' board. In the filing, he also said he expects to meet with management to discuss a potential sale, as well as other large shareholders.

BEA shares jumped as much as 5 percent on the Icahn news. However, that was still below their 52-week high of $16.77, reached on Oct. 31, 2006.

Icahn had previously reported that he held 7.94 million shares, or about a 2 percent stake, as of June 30.

Icahn said BEA has "great technology" but expressed doubts about the firm's ability to compete with larger rivals. BEA makes application integration software for business customers, vying against companies such as Oracle, IBM and Sun Microsystems.

"As you can see by the fact [that] the licensing business hasn't been growing--that is extremely difficult and almost dangerous for its future because of the huge financial strength of its competitors," he said.

He said in the filing on Friday that his funds "believe that a strategic acquirer could utilize greater resources and market presence than the Issuer to advantage the Issuer's innovative technology and thereby profit from higher revenue growth and the elimination of duplicative costs."

Icahn also said he believes that consolidation in the technology industry is leading to increased competition that may place independent software vendors at a competitive disadvantage.

He said he may seek to have BEA Systems hold an annual shareholder meeting, as one has not been held since July 2006, and may seek to nominate directors.

BEA was not immediately available to comment.

- Reuters contributed to this story.