Tuesday, September 14, 2010

HP and IBM Rumored to Chase More Networking & Security Firms; Who Else Might They Acquire?

Today, shares of networking and security technology vendor Radware (RDWR) have shot up $8.93, or almost 33%, to $28.75, after an Israeli business publication the company, which is based in Tel Aviv, is “in talks to be sold to either HP or IBM” for an expected deal value of $945 million, or $45 per share — obviously, a lot higher than the current price.

There has been rumors initiated by local newspapers in Israel about takeover valuations in the past that ended up false. While I would anticipate more deals in storage and security particularly with cloud services capabilties, they will likely be more uncontested deals given in today's WSJ IBM CEO Samuel Palmisano publicly criticized rival H-P's decision to spend heavily to acquire 3PAR .

"H-P used to be a very inventive company," Mr. Palmisano said. IBM would never have paid as heavily as H-P did to acquire a company such as computer-storage provider 3PAR, he said. "[H-P] had no choice," said Mr. Palmisano. "Hurd cut out all the research and development."  H-P earlier this month acquired 3PAR for $2.4 billion, beating out Dell Inc. in a bidding war by paying more than three times the company's closing stock price before Dell's initial bid.

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