Cloud // Cloud Storage
03:36 PM

Brocade Shares Jump On IBM Takeover Talk

Report indicates networking gear vendor may follow Netezza on Big Blue's acquisition list.

Shares of Brocade were up almost 10% in late afternoon trading Wednesday following a report that IBM is eyeing the networking gear manufacturer as a possible takeover target.

Brocade shares were up 9.96%, to $6.21, in the final hour of trading. At one point during the day the shares were up as much as 13%. The spike followed a Barron's report that said IBM chief executive officer Sam Palmisano was interested in the company.

Acquiring Brocade, however, would be a departure for Palmisano, who over the past several years has divested hardware units while beefing up Big Blue's portfolio of business software products. But Palmisano earlier this week showed he's not entirely averse to hardware, as IBM announced a deal to buy out business analytics appliance maker Netezza for $1.7 billion, or $27 per share.

Netezza shares were trading above $27 Wednesday on speculation that other vendors, such as Hewlett-Packard or Oracle, might enter the bidding for the company.

Some analysts and shareholders feel IBM's offer for Netezza is too conservative. Netezza investor Anthony Kolt filed suit against Netezza's board Wednesday in Delaware Chancery Court. "Netezza's directors have not acted in a manner that is designed to obtain the highest price reasonably available to shareholders," Kolt said in his complaint.

The suit called IBM's offer of $27 per share "an exceptionally low price for Netezza."

IBM has said it plans to spend about $20 billion on acquisitions during the next five years. Under Palmisano, the company has already spent $20 billion on takeovers in roughly 100 deals. IBM shares were up .17%, to $132.31.

Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
Google in the Enterprise Survey
Google in the Enterprise Survey
There's no doubt Google has made headway into businesses: Just 28 percent discourage or ban use of its productivity ­products, and 69 percent cite Google Apps' good or excellent ­mobility. But progress could still stall: 59 percent of nonusers ­distrust the security of Google's cloud. Its data privacy is an open question, and 37 percent worry about integration.
Register for InformationWeek Newsletters
White Papers
Current Issue
2016 InformationWeek Elite 100
Our 28th annual ranking of the leading US users of business technology.
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join us for a roundup of the top stories on for the week of June 19, 2016. We'll be talking with the editors and correspondents who brought you the top stories of the week to get the "story behind the story."
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.