SAP ups Retek bid to $616M, tops Oracle

The company is offering $11 per share in what it called its final offer

SAP AG showed its determination to hold on to buyout target Retek Inc., offering a new bid of $11 cash per share today, topping Oracle's Corp.'s $9-per-share offer.

Minneapolis-based Retek has accepted the amended offer, SAP and Retek said in a joint statement. The new deal represents a 29% premium over SAP's first offer, and an 86% premium on Retek's closing share price the day before SAP announced its deal to acquire the company.

Retail management software maker Retek was caught in a tug-of-war between rivals SAP and Oracle after SAP announced a deal Feb. 28 to buy Retek for $496 million (see story). One week later, Oracle launched its own bid of $504 million (see story). SAP's latest bid offers Retek shareholders $616 million.

Walldorf, Germany-based SAP said this deal is its best and final offer for Retek. Retek's board of directors unanimously recommended that the company's stockholders accept the revised bid, the joint statement said. Retek had never commented on Oracle's surprise bid.

The prize the two vendors are tussling over is a financially struggling company with a key asset: a strong position in the retail market, a space in which Oracle has little presence and into which SAP has for years tried to break in without success. Retek sells a broad range of retail-based applications, including software for operations management, supply chain planning and execution, merchandise planning and product demand forecasting. It has more than 200 customers in 20 countries.

Oracle executives have said they see blocking SAP's acquisition of Retek as a key step in gaining the dominant position in the U.S. ERP software market. Analysts say Oracle's interest in buying Retek was well known before SAP jumped in with its preemptive deal.

At the CeBIT trade show last week, SAP CEO Henning Kagermann said the retail sector is an important growth market for SAP and one to which the company has a "high commitment."

Oracle representatives weren't immediately available for comment.

The new, amended offer has one additional change: In a sign that SAP isn't confident Oracle won't make another counteroffer, it arranged for the deal's termination fee to increase from $15 million to $25 million.

SAP's tender offer is set to expire at 12 p.m. Eastern time on April 1.


Copyright © 2005 IDG Communications, Inc.

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