The Retek board had already accepted a £275m offer for the company from SAP, but Oracle has put in a higher bid, at £292m.
US-based Retek provides an integrated retail application suite to more than 200 customers in over 20 countries around the world. Users include Abercrombie & Fitch, Bhs, Gap, New Look, Dixons, French retailer FNAC, Ingram Micro and the US Postal Service.
When tabling its offer for Retek last week, SAP said the retail industry is entering a new phase of packaged software adoption as retail companies increasingly consider IT as a strategic instrument to drive business growth. It said the combination of Retek's application portfolio, industry expertise and market presence would allow it to respond to this demand.
But Oracle, already a close business partner of Retek and shareholder in the company, sees the acquisition as an ideal way to take a big step ahead of SAP in the US retail market. It recently increased its shareholding in Retek to about 10%.
"Oracle's applications business in North America is larger than SAP's," said Oracle chief executive Larry Ellison. "We intend to defend our number one position."
Oracle president Charles Phillips said, "Retek customers I have talked to said they would prefer Oracle to buy Retek."