Oracle signs definitive deal to acquire Retek

March 22, 2005     (Page one of two)

Oracle reports it has signed a definitive contract to acquire Retek, defeating its competitor SAP in the bidding war for the retail software maker.

In a statement, Oracle said it will acquire Retek at a price of $11.25 for each outstanding Retek share. SAP, which had offered $11.00 per share for Retek, has dropped out of the bidding.

"Oracle has the largest applications business in North America, and we intend to expand that leadership position," Oracle CEO Larry Ellison said in a statement. "Combining Oracle with Retek is an important step in that direction, and it strengthens our position in the retail applications market globally."

Oracle's announcement puts an end to the bidding war for Retek. SAP had announced on Feb. 28 that it had reached a deal to buy Retek for $8.50 a share. Oracle responded on March 8 with a bid of $9 a share.

However, Retek will now have to pay SAP a $25 million termination fee, because it is walking away from its previous definitive merger agreement with the software giant. The two companies had bumped up the fee from $15 million when SAP upped its bid to $11 a share.

SAP plans to take that termination fee and reinvest it in its retail strategy, said Bill Wohl, an SAP spokesman. He declined to list other potential acquisition candidates in the retail market.

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