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Oracle considers bid for Intec

Report reveals talks held between the database giant and the provider of billing systems for telecoms companies.

By Chris Green, 27 Nov 2006 at 11:22

Oracle, the enterprise software company has held potential takeover talks with Intec Telecoms Systems, the UK-based provider of billing and administration software for the telecoms industry.

A report in the Sunday Telegraph confirmed that representatives of the two companies met in London recent and conducted informal talks about a possible bid by Oracle. No formal offer has been made at this time, but the initial market reactions have been positive. Intec is valued at around £100m, which would make it one of the Oracles smallest purchases in its recent acquisition run.

Despite having issued a profits warning a week ago shares in Intec, which are listed on the UK Aim market, jumped three per cent amid expectations of a bid before Christmas.

Intec has tried to play down the interest surrounding it. "The company can confirm that it is not in preliminary talks with any party with regard to any possible offer for the Company. Management remains focused on improving the financial performance of the business in 2007" the company said in a brief statement.

Intec produces a number of back office software applications for telecoms service providers and network operators. Customers include Rome Telecom, KPN, Dialog Telecom and India's Mahaganar Telephone Nigam.

Oracle has been highly acquisitive in the past two years, snapping up companies large and small including PeopleSoft and Siebel to solidify its position in the lucrative and highly-competitive Customer Relationship Management software market. Most recently, it purchased Metasolv, another software provider in the vertical market for telecoms admin software, a deal which underlines Oracle's interest in becoming a major player in profitable niche enterprise software sectors that can be integrated with its other back office products.

Intec is also believed to have held talks with other interested parties, and private equity houses have already begun building up shareholdings in anticipation of a takeover. General Atlantic, the US private equity investor has acquired a 23 per cent stake in Intec. It is not expected to launch a full takeover bid, but rather is looking to drive up the value of Intec and benefit from any third party takeover attempt.