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 process—a 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 wins—either 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.
"SAP believes that integration at the applications level—rather than at the database level—is what will drive competitive advantage for companies looking to align their IT infrastructure in order to respond swiftly to changes in the fast-moving retail market," the companys statement reads. "Moreover, SAP is committed to openness to all databases in the market, not locking customers out of choices. SAP remains strongly committed to the retail industry."
As far as whether it would increase its bid, however, SAP wasnt saying. "Regarding yesterdays announcement by Oracle related to Retek, SAP has no further comment at this time," the statement reads.
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.