December 12, 2002 5:11 PM PST
Borland shares rise on takeover rumors
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Shares closed up 74 cents, or 6.4 percent, to $12.31, on 1.8 million shares traded. A company representative when asked about the rumored takeover said Borland would not comment on market speculation.
In the wake of IBM's $2.1 billion offer to
"There has never really been one stand-alone tool vendor that has been really successful. There's been a quiet consolidation going on," said Forrester Research analyst Joshua Walker, who recently wrote a
IBM's Rational offer could create friction between it and Microsoft. Microsoft relies on Rational's high-end application modeling tools for complex applications that bridge Microsoft and IBM software platforms. Industry analysts and IBM competitors have questioned whether IBM will maintain Rational's platform neutrality and traditionally strong partnership with Microsoft once Rational becomes part of IBM.
Press reports have also speculated that Microsoft might make a counter-offer for Rational, which IBM is offered to buy for $10.50 per share--a 28 percent premium over its share price of last Thursday.
In October, Borland spent $185 million to
If Microsoft were interested in Borland, its primary focus would lie with the TogetherSoft modeling tools, said Stephen O'Grady, an analyst at RedMonk, an IT research firm in Hollis, N.H. Currently, Microsoft sells its own project management and modeling tools for less complex software development projects, and partners with Rational for projects that demand more sophisticated modeling and management.
"The TogetherSoft piece would be the most attractive addition for Microsoft and give them a real entry in the modeling space as opposed to playing catch-up," said O'Grady. "They would also get some advanced development tool functionality."
Reuters contributed to this report.
