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Oracle takes aim at Retek

Oracle announced on Tuesday that it was planning to make a cash offer yestersday to purchase the software maker Retek, spurring a possible bidding war with SAP, its main rival in the corporate software market.

Oracle's bid of US$9 a share, or US$525 million, bests SAP's bid of US$496 million, made on Feb. 28. Retek, which is based in Minneapolis, Minnesota and specializes in software packages that large retail chains like Best Buy and Gap use to run their businesses, had already agreed to be acquired by SAP.

In a conference call with analysts held after the markets closed on Tuesday, Lawrence Ellison, Oracle's chief executive, said his company bought 5.5 million shares of Retek common stock this week, representing nearly 10 percent of the total shares outstanding.

"Retek is in fact the category leader in retail," Ellison said. "And the combination of Retek and Oracle would certainly put us in an extremely strong position to exploit a market that is underpenetrated."

As is, SAP's bid of US$8.50 a share was a 42 percent premium over the company's closing price of US$6 on Feb. 25. Shares of Retek closed on Tuesday at US$8.59, down US$0.30, but were trading at US$10.01 after hours.

A spokesman for SAP said the company would have no comment until executives had a chance to review Oracle's offer.

Oracle's bid to snatch Retek from SAP comes just two months after it completed its contentious takeover of PeopleSoft for US$10.3 billion. Oracle purchased PeopleSoft to gain a larger presence in the multibillion-dollar industry of software that companies use to manage their finances, inventory and procurement needs. SAP is the No.1 vendor in that market.
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