In the face of Oracle's recent move to outbid rival SAP for Retek, SAP will be forced to concede or pay through the nose, according to Oracle President Charles Phillips.
Oracle President Charles Phillips had to admit: Theres a good dose of "nyah-nyah" in the companys recently announced move to pounce on Retek, the retail technology vendor that SAP intended to swallow.
As it is, Oracle Corp. owns just under 10 percent of Retek Inc., the retail software developer that Oracle seeks to acquire
for $9 a share, as it announced on Tuesday. Oracles offer trumps SAPs late February bid of $8.50 per share for Retek, or about $496 million in cash.
The percentage of Retek shares that Oracle bought up recently is significant, Phillips told journalists in a conference on Wednesday.
The strategy behind buying up shares was, first, to signal that Oracle was serious about buying the company, with which it had been in discussions since last October.
Were Oracle to acquire more than 10 percent of the company, the Redwood Shores, Calif., database giant would be required to start a tender processa process that Oracle did not desire.
The move to buy up Retek stock also signals to SAP that the company would need Oracles 9-plus percent if it wanted to acquire Retek, Phillips said.
Either way, Oracle winseither by acquiring Retek, or by pocketing a fat check from SAP in exchange for its shares, since SAP would have to up the bid well over what Oracle paid for its shares. "If we lose it, well make a ton of money on it," Phillips said. "The satisfaction of having SAP write us a big check" would be huge, he said, as is the satisfaction of presenting another hurdle to Oracles bitter rival.
Read more here about Oracle CEO Ellisons warning to SAP to watch its step in its competitive techniques.
As far as SAPs superior interoperability goes, thats debatable. A report from Aberdeen Group Inc. cites several reasons why Oracle would be a less disruptive acquirer, including the following: Accenture would likely remain the preferred systems integrator; Oracle would remain the database of choice; Oracle Financials would remain the back-office system of choice; and little to no rationalization of Retek functionality would be required. To read more about the report, click here.
Next Page: Oracles plans for the retail industry.