Oracle let its $17 per share offer for BEA lapse yesterday, but activist investor Carl Icahn has demanded the middleware firm put the offer to shareholders anyway.

Icahn, BEA's biggest shareholder, said in an open letter: "I am sure that the BEA board would agree with me that it would be desirable not to have to put BEA through a disruptive proxy fight, a possible consent solicitation and a lawsuit."

Presumably, he'll make sure that is just what happens, unless BEA commits to his two suggestions.

Firstly, he says, the board should "allow its shareholders to decide the fate of BEA by conducting an auction sale process and allowing the shareholders to accept or reject the proposal made by the highest bidder".

He added, ominously: "BEA should not allow the stalking horse bid from Oracle to disappear (failure to take the Oracle bid as a stalking horse would be a grave dereliction of your fiduciary duty in my view)."

Icahn also warned: "BEA should agree not to take any action that would dilute voting by issuing stock, entrench management or derail a potential sale of BEA."

Just to be on the safe side, Icahn has kicked off a lawsuit demanding that BEA hold its annual shareholder meeting before engaging in any "scorched earth" policies to stymie a hostile bid.

BEA's management seemed intent on frustrating any takeover of the company, said Icahn, and he warned: "You should have no doubt that I intend to hold each of you personally responsible to act on behalf of BEA's shareholders in full compliance with the high standards that your fiduciary duties require, especially in light of your past record."

While Oracle is publicly walking away from the bid, observers reckon it is still intent on swallowing BEA. Icahn's very public intervention may ensure a more focused BEA board next time round. ®

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