SAP defends Business Objects deal

By Georgina Prodhan and Nicola Leske

FRANKFURT (Reuters) - Software maker SAP (SAPG.DE) defended its 4.8 billion euro ($6.8 billion) deal to buy data mining firm Business Objects BOBJ.PA BOBJ.O as analysts questioned the high price and investors pushed down its shares.

SAP said the move was neither a reversal of its policy to make only small, bolt-on acquisitions nor a reaction to an aggressive buying spree by rival Oracle (ORCL.O). It said more purchases would make sense in some areas.

The agreed deal will join market leaders in software that helps large enterprises integrate and automate areas such as supply chains and human resources, from SAP's side, and software to mine data for business intelligence from Business Objects.

The deal and apparent shift in strategy took market players off guard.

"We are surprised that SAP always repeated its mantra of organic growth and finally decided to acquire Business Objects," UniCredit said in a note to clients.

SAP shares closed down 4 percent in Frankfurt at 39.95 euros in trading volumes three times the daily average for the last 90 days -- by far the leading decliners in the German DAX index.

"We regard the deal as more risk-enhancing which also comes with too high a price," wrote German bank Sal. Oppenheim as it downgraded SAP to "neutral" from "buy".

Shares in Business Objects, which rallied on takeover speculation in recent weeks, leapt 17.3 percent to 41.07 euros in Paris -- just below SAP's 42-euro a-share offer -- and 14.4 percent to $57.53 in New York.