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SCMP Reporter

US firm vows to defend home market leadership against giant German rival

Fresh from its takeover battle for rival PeopleSoft, Oracle is locked in a tug-of-war against German software giant SAP to acquire Retek, a Minnesota-based retail software applications supplier.

Oracle yesterday offered to buy Retek for US$504 million  in cash, or US$9 a share, to trump SAP's earlier offer of  US$496 million, or US$8.50 a share.

On Monday and Tuesday this week, Oracle bought 5.5 million shares of Retek common stock, or almost  10 per cent of the outstanding shares.

The unsolicited bid from Oracle came  eight days after Retek's board signed a merger agreement with SAP and endorsed it to Retek shareholders.

The offer has also upset  SAP's plan to build its applications business in the fast-growing retail sector and rattle Oracle on its home turf.

'Oracle's applications business in North America is larger than SAP's,' Oracle chief executive Larry Ellison said. 'We intend to defend our No1  position.'

SAP has declined to comment.

Compared with the gruelling 18-month courtship of PeopleSoft, its US$10.3 billion acquisition cost and the delicate integration of staff and products that has followed, Oracle expected its proposed acquisition of Retek to be neither complex nor lengthy.

'Retek has put itself for sale and therefore, it is under obligation to accept the best price,' Oracle chairman Jeff Henley told the South China Morning Post.

'This is not as large as the PeopleSoft deal, so it should not take a long time.'

Retek sells its integrated retail application suite to more than 200 customers in more than 20 countries.

It has about 525 employees and posted revenues of US$174.2 million last year.

Mr Henley - who was in Australia this week to meet PeopleSoft users, including drinks giant Foster's Group - said the bid for Retek would not be a distraction to Oracle's  integration of  PeopleSoft staff, products and customers.

'We're making great progress,'  he said. 'The Retek acquisition makes us stronger and more competitive, especially in markets like China and India, where the retail competition is growing rapidly and getting more sophisticated.'

Mr Henley said most of Retek's applications have been built on Oracle's technology platform.

About 80 per cent of the company's  customers also run Oracle database and other business infrastructure software.

Oracle and Retek have been partners since 1986, providing systems to many of the world's largest retailers. Retek customers included Tesco, Best Buy, Gap, Sainsbury's and Selfridges.

Mr Henley said Oracle  had a detailed plan to buy  Retek before it went after PeopleSoft. That acquisition strengthened Oracle's position as the world's second-largest business applications supplier after SAP.



Oracle trumps SAP's offer to merge with Retek