22 March 2005 Oracle has won its battle for retail software maker Retek after German rival SAP ruled out further bids.
Retek has been at the centre of a tug of war since SAP made an initial $496 million bid for the software maker in February. Oracle’s offer of nearly $670 million has convinced SAP to rule out further bids.
In a statement, SAP executives said: “We concluded that neither our shareholders nor retail customers would benefit from an auction process that would further inflate the purchase price, and in the long run, not deliver the returns we demand.”
Oracle’s offer represents a hefty premium for Retek: in its latest annual report it posted revenues of just $174 million.
But enterprise software vendors like Oracle and SAP are keen to establish a presence in the retail sector, which has traditionally eschewed packaged applications.
SAP still remains the dominant player in the retail industry with around 2,400 clients; Oracle’s acquisition takes its customer base to about 1,000.
Retek’s president and CEO Marty Leestma said: “We believe that Oracle’s offer is a good deal for Retek stockholders, and all directors in attendance at our board meeting have recommended that it be accepted.”
Ovum analyst, David Bradshaw commented: “This is all over remarkably quickly, considering the enmity between the two bidders. SAP will not be altogether disappointed, because it forced Oracle to pay a very high price.”
Retek will now have to pay SAP the $25 million termination fee they agreed when SAP made its second offer.