SAP Ups Bid To Wrest Retek from Oracle

SAP took another shot in its battle with Oracle, raising to US$11 a share its bid for Retek. SAP had been set to buy the retail applications provider for $8.50 a share, then Oracle countered at $9.

The war, however, is far from over, analysts say.

“I would be surprised if Oracle didn’t go through another round,” said Evan Quinn, group vice president for applications at analyst firm IDC, told CRM Buyer. “SAP’s $11 per share bid, upping the ante by $2 per share, was an aggressive move by SAP — no nickel and diming here.”

Obvious Moves

Gartner analyst Andrew White told CRM Buyer in an e-mail that the bid was far from asurprise and will prompt a further raise from Oracle.

“We thought SAP would bid at around $11, so now we expect onemore bid from Oracle [to win] at around $12 to $12.50,” he said.

The $11 offer is 5 percent higher than Retek’s trading price at the market’sclose yesterday and sets the company’s price tag at over $600 million. Butthe battle is about more than Retek’s straight value.

“This is not about realizable revenue in the short term,” White said. “This is aboutstrategy. Oracle would base its retail strategy on Retek. SAP would [do so too] to alesser, but not negligible, extent. This is about who will lead theapplication business in retail, period.”

Oracle’s Needs

Oracle has more at stake than SAP, because Oracle’s retail software strategyis tied closely to Retek. Retek’s retail customers include Nordstrom andGap, some of the biggest names in the business.

“Though SAP would lose out by not winning Retek, it is [already] established inretail, it does have credibility, and it could go elsewhere to recover someof the IP it would lose should Retek go to Oracle,” he said.

For SAP, the acquisition is, in part, a way to prevent Oracle from gainingground.

“There are other acquisition options, but the reason why SAP is sofocused on Retek is that Retek is Oracle’s best fit in this space. For SAP,landing Retek is a two-fer,” Quinn said, a way to gain value for itself and deny that value to Oracle.