The Oracle & BEAS Systems Case. 1. Describe the main issues from the point of both Oracle and BEA Systems. Who is more correct in the negotiation over price? 2. On October 12 when Oracles offer of $17 was made public, BEAs stock price increased to $18.82, more than the offer price. On January 16, 2008, when the new offer of $19.375 per share is made, BEAs stock price increased but didnt surpass the offer price. Why? What kind of information set is at play in the market in each case? 3. On January 16, 2008, after the new offer is made and accepted, what is the markets estimated probability of the deal closing? What is the markets estimate for synergies? Assume premerger prices of $15.50 for BEA and $22.00 for Oracle. After the announcement prices were $18.46 for BEA and $21.90 for Oracle Shares outstanding of Oracle were 5,107 million and BEA systems shares were 413.032 million. How is the synergy divided between the two groups of shareholders? 4. Assume a market rate of return of 14%, a risk-free rate of 4%, and a beta of 0.98 for BEA Systems. Assume also that BEA will continue to grow at its recent average annual growth rate of 9% for an indefinite period. Prepare free cash flow projections for BEA and estimate its value. Does Oracles initial offer of $17 per share undervalue BEA? What about the $19.375? 5. What average annual growth rate in sales justifies Oracles original offer of $17 per share? New offer of $19.375? BEAs demanded price of $21 per share? 6. What is your assessment of anti-trust issues concerning this merger? Please compute the free cash flow and Show all your workings