Oracle raises bid for Retek again to shake off rival SAP

Oracle Corp raised its offer to buy Retek Inc by 25 percent to US$631 million, the second time this month it has outbid larger competitor SAP AG for control of the small business-software maker.

Oracle raised its bid to US$11.25 a share from US$9, topping the US$11-a-share offer from SAP that Retek's board accepted on March 17. SAP originally bid US$8.50 a share on Feb. 28.

Oracle, the world's second largest maker of business-management software behind SAP, is looking to acquire Retek to increase sales to the retail industry and to help remain the top North American seller of software used to handle business tasks such as payroll and human resources. Oracle bought PeopleSoft Inc in January for US$10.3 billion. Retek's customers include the No. 1 US electronics reseller Best Buy Co.

Oracle spokesman Jeff Lettes declined to comment beyond the statement. Retek spokeswoman Salena didn't immediately return a voice mail to her office after business hours.

"Oracle's dogged pursuit of PeopleSoft seems to indicate that Oracle management is fairly price-insensitive when it comes to completing mergers that they view as strategic," Sanford C. Bernstein & Co analyst Charles Di Bona said in a March 17 note to investors. "If SAP were to purchase Retek, Oracle's role in the retail market could be threatened."

Oracle CEO Larry Ellison announced the tender offer for Minneapolis-based Retek's shares on March 8 after Oracle bought 9.8 percent of the stock. He told analysts on a conference call that day that SAP got its bid in first because Oracle was "distracted" by the fight to win PeopleSoft.

Shares of Minneapolis-based Retek rose US$1.13, or 11 percent, to US$11.65 in NASDAQ Stock Market composite trading on Thursday. The stock traded at US$6 before Walldorf, Germany-based SAP made its offer Feb. 28. Shares of Redwood City, California-based Oracle, which fell US$0.16 to US$13 in extended trading, rose US$0.14, or 1.1 percent on Thursday.

Companies in the US retail industry may increase their information technology budgets by 5.8 percent this year as they upgrade their stores with systems such as radio frequency identification, or RFID, that helps track goods, according to Boston-based AMR Research Inc.

Oracle has 800 retail customers using its business-management applications. SAP said it has more than 2,400 customers in the industry, including cosmetics company Body Shop International Plc and J Crew Group Inc.

The deal would let Oracle sell Retek customers more of its software, Ellison said this month. About 80 percent of Retek users run their business programs on Oracle's database software.

Because Oracle's products don't overlap with any of Retek's, Oracle will continue to support and develop all of the company's retail applications, Ellison said this month.

Customers have also told Oracle they would be happier with an Oracle takeover than an SAP purchase, he said.