SAP nears end of battle for SAP SI

SAP SI board recommends its shareholders consider the latest offer

SAP hopes to end its long battle to acquire the remaining shares in SAP Systems Integration (SAP SI) that it doesn't already own.

"The SAP SI executive board and supervisory board have recommended to its minority shareholders to consider the favorable offer from SAP," said SAP SI spokeswoman Daniela Rink on Monday.

The offer is €39.30 ($46.07) per share, up significantly from the "special offer" of €20.40 that SAP made in June 2004.

The latest offer is also around twice the value of SAP SI stock as determined using a "discounted earnings method," SAP said last week in a statement.

SAP currently owns 94.7 percent of SAP SI, according to Rink.

In March 2004, SAP announced its intention to take over SAP SI completely and merge the company with its own consulting unit, in a move to end consultancy duplication and save costs from running a separately quoted subsidiary.

Once SAP owns 95 percent of SAP SI shares, the software company plans to initiate a "squeeze-out," which, essentially, allows SAP to make another offer that can be accepted or rejected by shareholders, according to Stephan Kahlhoefer, an investor relations spokesman at SAP. If rejected, then the issue goes to a special body, which decides what the shareholders must accept, he said.

Although SAP already has full management control of SAP SI, the company must still, for instance, publish reports to shareholders. "This is something we would like to discontinue," Kahlhoefer said . "And to do that, we need to own the company fully."

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