It happened on Thursday, when the German business weekly WirtschaftsWoche reported that SAP CEO Henning Kagermann said hed be open to a merger with bitter rival Oracle if Larry Ellison were to bring it up.
At least, thats what the Associated Press and the Boston Globe said he said to a German magazine, even going so far as to call and confirm with WirtschaftsWoche.
Me, when I tried to check out the article, courtesy of Googles English translation, I got something along the lines of "Kagermann forced to access Ellison—and feel can as secret winners. SAP brought Oracle to pay too much, says Bruce Richardson, Analyst with the US consulting house AMR Resarch. Indeed are practical 630 million dollar for an enterprise with a conversion of 174 million dollar and without profit a proud sum."
Umm… maybe I got the wrong article when I searched?
What Kagermann said, in essence, and what started the whole feeding frenzy, is this: "I would listen to him."
Well, of course Kagermann would listen to him if Ellison made an offer. Its called fiduciary duty.
For Kagermann to tell a business magazine that hed dump boiling oil on Ellisons head if he stepped within 100 feet of Waldorf headquarters would be irresponsible to shareholders, even if its an apt metaphor for the response Oracle would indeed receive.
"He has to listen to any offer," said Paul Hamerman, an analyst at Forrester Research. "He has a fiduciary duty to shareholders to any offer that would come, but I dont think this type of deal is feasible."
Why its not feasible is obvious to anybody who sat through the endless court cases as the Oracle-PeopleSoft merger took 18 months to laboriously drag through first the United States and then the European courts.
If the U.S. Department of Justice didnt like the idea of the market for enterprise applications shrinking to two players, Oracle and SAP, theyd have a baby at the idea of one huge blob of a company dominating the space. In essence, that would be four companies squashed into one: J.D. Edwards, PeopleSoft, Oracle and SAP.