Software Consolidation Continues

Consolidation in the software sector continued on Monday, with business software giant SAP snapping up retail software maker Retek for $496 million.

Shares of Retek rocketed 40% on the news, and rival JDA Software gained 14% on speculation that it could be next.

The Retek acquisition was viewed by analysts as another attempt by SAP to keep pace with Oracle following its takeover of PeopleSoft last month. SAP also recently acquired TomorrowNow, which is based near PeopleSoft and populated by ex-PeopleSoft workers. Retek also once had close ties to Oracle.

Retek boasts revenues of $174 million and more than 200 worldwide retail customers, but the company’s fortunes have fluctuated with the health of the retail industry. The company’s board unanimously recommended that shareholders accept SAP’s offer.

The broader market stumbled Monday on inflation fears and rising interest rates and oil prices.

The Nasdaq lost 13 to 2051, the S&P 500 fell 7 to 1203, and the Dow dropped 75 to 10,766. Volume rose to 1.8 billion shares on the NYSE, and 2.15 billion on the Nasdaq. Decliners led 20-13 on the NYSE, and 18-13 on the Nasdaq. Downside volume was 69% on the NYSE, and 62% on the Nasdaq. New highs-new lows were 317-36 on the NYSE, and 146-60 on the Nasdaq.

After the close, Macrovision beat estimates but warned.

During the day, EDS climbed 3% on reports that the company could win a $7.6 billion contract with the British government.

PacificNet soared 37% after raising guidance.

Satellite radio stocks rose after XM Satellite raised prices.

Orckit jumped 11% on a stock split.