Oracle Beats SAP to Buy Retek

NEW YORK/FRANKFURT (Reuters)—Oracle Corp. has agreed to buy software firm Retek Inc. for $631 million, the U.S. database maker said on Tuesday, beating a rival bid by German business software maker SAP.

The agreement ends a three-week bidding war for the maker of software for the retail sector, with Oracle saying SAP had dropped out of the bidding. A spokesman at SAP's headquarters in Germany declined to comment on the company's Retek bid.

Oracle's winning offer was $11.25 per Retek share, valuing the company's equity at $631 million overall and exceeding SAP's raised bid of $11 per share.

SAP said earlier this month it did not feel it needed to buy Retek and called the $11 bid its "best and final" offer. Analysts said it was sensible that SAP had not allowed itself to be drawn into a bidding war after having raised its offer once.

"Given the expensive character of Oracle's acquisition of Retek, we welcome the fact that SAP dropped its bid," said Torsten Schellscheidt of WestLB Equity Markets, adding Oracle's bid valued Retek at more than three times this year's sales.

Shares in SAP fell 0.5 percent to 119.50 euros by 4:32 a.m. EST, underperforming the flat European technology index.

The big software companies have squared off for three weeks over Retek, which makes software for tracking sales and inventories in the retail market, an area that SAP and Oracle both see as untapped.

Oracle said on Friday it had received preliminary approval from U.S. regulators for the proposed deal.

California-based Oracle is the biggest database maker but has been gunning for more than a decade to usurp SAP's position as the top provider of software applications, which automate business processes such as payroll and human resource planning.

Both Oracle and SAP have made clear they will pursue other acquisitions in the months ahead to boost their longer-term growth prospects.

Copyright © 2005 Ziff Davis Media Inc. All Rights Reserved. Originally appearing in The Channel Insider.