March 08, 2005

Oracle Bids For Retek, Tries To Block SAP

By Charles Babcock and Laurie Sullivan

InformationWeek

In a blocking move against application rival SAP, Oracle will make a bid Wednesday morning to acquire Retek Inc., a leading supplier of retail-management applications, for $9 a share.

Oracle's move comes just one week after SAP said its North American subsidiary, SAP America Inc., had signed a definitive agreement to acquire Retek for $8.50 per share, or approximately $496 million.

"We have the largest application business in North America, with about 23,000 customers, and [we] intend to defend the No. 1 position," Oracle CEO Larry Ellison said in a conference call Tuesday.

An SAP spokesman declined to comment on Oracle's bid until SAP has had a chance to review the Oracle offer.

On Monday and Tuesday, Oracle purchased 5.5 million shares of Retek common stock, representing about 10% of its total shares outstanding, according to Oracle. Oracle spokesmen said Tuesday that the company planned to follow up that move Wednesday with a tender offer to purchase all outstanding shares at $9 a share.

Oracle delivered a letter to the Retek board of directors Tuesday that said Oracle could finance the purchase from its existing cash balances, and its offer "is not subject to any financing conditions."

In the letter, Ellison claimed Oracle was matching the terms and conditions of the SAP offer "but at a higher price." During the conference call, he said Oracle began considering making a bid for Retek in September.

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