Oracle Counters SAP Bid For Retail ISV

Oracle chief Larry Ellison proves once again why he's considered one of the most aggressive top executives in the IT industry. Just one week after Oracle rival SAP announced plans to buy Retek, Oracle today countered with a cash tender offer to scoop up the retail industry software giant.

Oracle officials contend that Retek is a better fit for the Redwood Shores, Calif., company, than casting its lot with German enterprise applications leader SAP. Oracle and Retek have been partners since 1986, according to Oracle, with the retail-based ISV building many of its applications with Oracle development tools atop the Oracle database infrastructure.

"The Retek customers I've talked to said they'd prefer that Oracle buy Retek," said Oracle president Charles Phillips, in a prepared statement "The vast majority of Retek customers already have a strong Oracle relationship."

Oracle's offer is to buy all outstanding shares of Minneapolis-based Retek for $9 per share, which bests SAP's offer made Feb. 28 of $8.50 per share. Oracle officials said the company already purchased 5.5. million shares, or 10 percent, of Retek common stock earlier this week.

In the statement, Ellison said the move is intended to protect Oracle's No. 1 market share position for enterprise applications in North America, a position gained when Oracle battled it out to buy PeopleSoft late last year. Worldwide, SAP is tops in the software category.

Retailing software is becoming an increasingly strategic weapon to have in the arsenal, with many retail giants like Wal-Mart turning to IT to run their businesses, from warehouse to cash register. Retek would be a prized acquisition for either SAP or Oracle with its integrated retail application suite and set of solutions, and 200 customers. It's a $174.2 million company with 525 employees.