Oracle outbids SAP for Retek

Enterprise software giant Oracle Corp., fresh off its successful acquisition of PeopleSoft Inc., has outbid arch-rival SAP for Retek Inc., a provider of supply chain solutions to the retail industry.

SAP's announcement that it had signed a definitive merger agreement to acquire Retek propeled Oracle to launch a bidding war for the software company. SAP's original offer of $8.50 per share, or $496 million, eventually was topped by Oracle's winning bid of $11.25, or $650 million.

Retek provides an integrated retail application suite and best-of-breed solutions to more than 200 customers in more than 20 countries, including Tesco, Best Buy, Gap Inc., Sainsbury's and Selfridges. Retek has 525 employees and posted revenues of $174 million in 2004.

"Retek is a more valuable acquisition to Oracle than SAP," notes Scott Langdoc, an analyst with AMR Research Inc. "With Retek, Oracle will be able to — with limited integration requirements — offer an industry-centric application set that combines critical store and backoffice retail execution technology with Oracle's current e-business suite."

The real value of the deal, Langdoc says, will come once Oracle fully integrates the technology it acquired from PeopleSoft.

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