Omniture shares jump on Visual Sciences merger; Tesoro up; BEA says 'no' to Oracle

By Sheri Kasprzak

New York, Oct. 26 - Omniture Inc.'s stock got a boost on Friday after the company said it will buy Visual Sciences, Inc. in a stock and cash deal valued at $394 million.

Omniture's stock leapt by more than 13.8% on Friday after announcing plans to purchase Visual Sciences. Visual Sciences' stock was also boosted by the news.

The combination, an analyst familiar with Omniture said, does make sense, and he said he feels the offer was fair.

"They're similar companies with complementary assets, so it is a good fit," the analyst said. "The offer seems fair to me."

Omniture plans to pay for Visual Sciences' stock at a 7.9% premium to the company's $16.72 closing stock price on Thursday.

In other news Friday, Tracinda Corp. announced plans to make a cash tender offer to increase its stake in Tesoro Corp.

The news sent shares of Tesoro up by more than 12% on Friday.

Tracinda said in a statement released Friday that it is hoping to increase its holding in Tesoro, a petroleum refiner, to 20%. Tracinda currently holds 4% of Tesoro's stock.

Elsewhere, BEA Systems, Inc. rejected, once again, Oracle Corp.'s $17-per-share offer, claiming the offer undervalues BEA, but Oracle says it is not coming up with any more money.

BEA's stock slipped by 5.88% on Friday.

A market analyst familiar with Oracle said the software developer will likely be back - after waiting for BEA's stock to fall even more - without budging from its current offer price.

Omniture to buy Visual Sciences

In Omniture's purchase of Visual Sciences, the company will pay $2.39 per share in cash and a fixed exchange ratio of 0.49 of an Omniture share for each share of Visual Sciences, for a total consideration of $18.04 per share.

The merger news sent shares of Omniture up on Friday with the stock trading in a range between $33.81 and $38.57. Omniture's stock closed the day up 13.81%, or $4.35, at $35.85 (Nasdaq: OMTR). The stock continued to climb - by 44 cents - in after-hours trading.

Visual Sciences' shares ended the day up 11.78%, or $1.97, at $18.69 (Nasdaq: VSCN). The stock gained another 18 cents in after-hours trading.

"With the tremendous growth opportunities we see in the online optimization market, we believe that in addition to being financially accretive to our shareholders, this is a strategic investment that will drive increased value for customers and partners," said Josh James, Omniture's chief executive officer, in a statement.

"We are facing a very significant opportunity defined by the rapid growth of online advertising and online business in general. This acquisition enables Omniture to accelerate our investments in advanced solutions that drive customer success as well as create further opportunities to cross-sell our growing portfolio of products to a combined customer base of more than 4,000 customers."

According to an Omniture statement released Friday, the merger should be accretive to its earnings immediately.

Once the merger is settled, in early to mid-2008, Visual Sciences shareholders will own 13.7% of the combined company.

"Omniture is a leader in online business optimization and absolutely the right company to leverage our technology and resources for the benefit of the industry," said Jim MacIntyre, Visual Sciences' CEO, in a news release.

Based in Orem, Utah, Omniture develops online business optimization software, and San Diego-based Visual Sciences provides web-based analytics services.

Tracinda to up Tesoro stake

In other news Friday, Tracinda said it will make a cash tender offer for shares of Tesoro.

Tracinda plans to tender for 21.875 million shares of Tesoro stock at $64.00 each, an 11.9% premium to Tesoro's $57.20 closing stock price on Thursday.

Shares of Tesoro were up $7.28, or 12.73%, to end at $64.48 (NYSE: TSO).

The shares Tracinda plans to buy represent 16% of Tesoro's outstanding stock. Tracinda owns 5.5 million shares, or 4%, of Tesoro's outstanding stock. Once the tender offer is complete, Tracinda will own 27.38 million Tesoro shares, or 20% of the company.

"Tracinda believes that the fundamentals of the petroleum refining industry make it an attractive area for investment," said a statement released by Tracinda on Friday.

"Tracinda has chosen to invest in Tesoro because Tracinda believes that the company is well positioned within the industry and has a management team that is effectively executing its strategic plan. Tracinda looks forward to participating in the growth of the company alongside the other shareholders."

BEA again rejects Oracle

In case it didn't make itself clear the first time, BEA Systems said Friday that Oracle's offer of $17 per share is "unacceptable."

BEA's stock continued to slide on Friday, this time slipping below $17 per share. At the end of the day, BEA's stock was down $1.03, or 5.88%, to close at $16.50 (Nasdaq: BEA).

"I really don't think they have any reason to be sticking their nose up at it," said one sellside trader on Friday afternoon. "I suspect Oracle's going to be back, but they're not going to raise their offer. It would probably be to their advantage just to wait for the stock to decline and I think there's a pretty good chance the stock [BEA's] will continue to slip."

In a letter addressed to Oracle Friday, BEA vice president of business development William Klein said the offer "significantly undervalues" BEA. BEA, in the letter, said it expects Oracle's offer to expire Oct. 28.

The right price, BEA has said, would be $21 per share, and Oracle has made it clear that it would not make that offer. Oracle has called the $21-per-share counter "impossibly high."

"Nobody would seriously consider paying that kind of multiple for a software company with shrinking license sales," said Charles Phillips, Oracle's president, in a letter responding to BEA.

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