SAP to buy Retek for $496 m

NEW YORK: Business software giant SAP AG said its North American unit will buy Retek Inc. for $496 million in an effort to expand its offering of retail software.

The deal values Retek at $8.50 a share, a 42 percent premium over its closing stock price of $6 on Friday. The shares rose to $8.43 in early Nasdaq trading.

Retek, which had revenue of $174.2 million in 2004, makes software that manages sales, inventory and supply-chain data for the retail industry. Its clients include Best Buy and Gap, and it competes with such companies as JDA Software Group Inc. and Manugistics Group.

"SAP and Retek had butted heads in the market, especially in North America," said RBC Capital Markets analyst Brad Whitt. "There could be some product integration issues, because there is some product overlap."

He said information technology spending in retail had become stagnant, although SAP had been gaining some momentum in the sector over the last couple of quarters.

Kaufman Brothers analyst, Alan Weinfeld suggested that Oracle Corp. would be a better fit with Retek than SAP because Oracle used to resell Retek Products in the late 1990s. "There's very little product overlap with Oracle," he said.

Oracle executives were not immediately available to comment.

The deal with SAP is expected to close in early April and is subject to customary closing conditions.