Enter the Oracle

Software giant Oracle says that it will make a cash tender offer to purchase all of the outstanding shares of Retek at $9 per share.


Last month, SAP’s North American subsidiary, SAP America, signed a ‘definitive merger agreement’ with Retek, that would have brought together one of the largest business software providers with the leading provider of software to the retail industry. The Retek board of directors approved the definitive merger agreement and said it unanimously recommended to its stockholders that they accept the SAP offer of $8.50 per share.


Enter Oracle. On Monday and Tuesday of this week, Oracle purchased 5.5 million shares of Retek common stock, representing nearly 10% of total shares outstanding. And now, the company says that it will make a cash tender offer to purchase all of the outstanding shares of Retek at $9 per share – $0.50 a share higher than the SAP offer.


‘Oracle’s Applications business in North America is larger than SAP’s,’ said Oracle CEO, Larry Ellison. ‘We intend to defend our number one position.’


In a statement, Oracle said that Retek and itself had been partners since 1986, providing systems to many of the world’s largest retailers. And it was in October 2004, it says, that they began discussions about combining the two companies. It went onto claim that most of Retek’s applications have been built on Oracle’s technology platform using Oracle’s development tools, and approximately 80% of Retek’s customers currently run Oracle’s infrastructure software.


‘The Retek customers I’ve talked to said they’d prefer that Oracle buy Retek,’ said Oracle President, Charles Phillips. ‘The vast majority of Retek customers already have a strong Oracle relationship.’


Oracle has contacted Retek’s management regarding the deal and has given Retek’s Board of Directors the details of its offer.