RealTime IT News

SAP Boosts Offer For Retek

SAP AG submitted a new $629 million bid for Retek today in its escalating bidding war with Oracle for control of the retail software and services company. The Retek board of directors unanimously recommended stockholders accept the SAP bid.

In late February, SAP offered $496 million for Retek, an offer that was quickly countered by Oracle with its $525 million bid last week.

SAP's revised offer represents a 29 percent premium over its original offer for Retek and a premium of 22 percent over Oracle's offer for the company.

"We believe that SAP's offer is a good deal for Retek stockholders," Marty Leestma, president and CEO of Retek, said in a statement.

The Minneapolis-based Retek provides an integrated retail application suite to more than 200 customers in more than 20 countries around the world. The company's software and services include merchandise operations management, store and multi-channel retailing, supply chain planning and optimization and demand planning.

The company has marquee contracts with retailers A&P, RadioShack, GAP, Circle-K, Kroger, Best Buy, Hallmark, Abercrombie & Fitch and the Home Shopping Network. With a 2004 annual revenue of $174.2 million and approximately 525 employees, Retek also has offices in Atlanta, London and Melbourne.

Previously, Retek built most of its software applications on the Oracle JDeveloper platform. But the company has recently moved onto an open standards base more suited to NetWeaver, SAP's own development platform.

"SAP is the undisputed leader in business applications in the U.S. and globally. The retail industry is a strategic priority for SAP, and we have many years of experience in developing and delivering retail solutions," Leo Apotheker, a member of the SAP executive board, said. "The combination of SAP and Retek will provide customers worldwide with a deep industry knowledge that they could not get from any other software combination."

Apotheker added in his statement, "With SAP, customers have a choice in selecting their database -- customers are not locked into a single database vendor. Moreover, with our open integration platform SAP NetWeaver, we can offer our retail customers a swift and painless path to integration and, with the business process platform, a clear and defined roadmap to the future of business software."

If Oracle ends up acquiring Retek, analysts say retailers will still be able to use their current technology investments because, unlike SAP, there is no product overlap between Oracle and Retek.

However, an AMR Research report issued this week points out that SAP's strength is its global reach and its existing retail sales and presales teams that would combine with the Retek field organization.