What is going on with Splunk (NASDAQ:SPLK) stock this morning? Shares of the software solutions company are up over 8% after it was reported that Cisco (NASDAQ:CSCO) had made an offer to acquire Splunk. Cisco was reportedly willing to pay more than $20 billion to take over Splunk, according to people familiar with the matter.
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However, the two companies are not currently in active talks, so it seems that Cisco is simply putting an offer on the table. Moreover, Splunk has a market capitalization of about $19 billion, which means that a $20 billion buyout would only imply a premium of roughly 3% from current prices. Moving higher, a $25 billion buyout would imply a premium of about 28%. If Splunk accepts Cisco’s offer, it would be Cisco’s largest buyout since its acquisition of Scientific Atlanta in 2005.
Morgan Stanley analyst Meta Marshall believes that a Splunk buyout by Cisco would be “strategically positive.” The analyst adds that “an ability to package Splunk’s leading Security analytics and ITOM solutions with other security offerings, further optimize distribution and pricing, could present very interesting potential M&A synergies for Cisco.”
So, what else should investors know about the potential SPLK stock takeover news? Let’s jump right in.
SPLK Stock: Splunk Surges on Cisco Takeover Offer
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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