The enterprise software giant Oracle is nearing a $6 billion deal with hospitality software maker Micros Systems, according a report from Bloomberg. While Oracle and Micros did not comment, FBR Capital Markets analyst Daniel Ives said that Oracle competitors could offer a higher bid to drive up the price. “We believe the most likely candidates would be SAP or IBM, which offers WebSphere, its own enterprise class e-commerce platform,” FBR Capital Markets analyst Daniel Ives said.
The announcement of Oracle’s potential acquisition is a sign of Larry Ellison’s, Oracle’s Chief Executive Officer, plans to combat the sluggish sales growth of the company over the past 10 quarters. As the Bloomberg article points out, “Oracle was late to the market for Internet-based cloud software and is now rushing to remake itself as a provider of gear and programs to underpin its clients’ shift to Web-based computing.”
Although the companies are in exclusive talks, and could fail to reach an agreement, this could be Oracle’s largest purchase since it bought Sun Microsystems for $5.7 billion in 2009. In the last ten years, the company has spent $50 billion to acquire nearly 100 companies. Indeed, the announcement of Oracle’s negotiations with Micro Systems is following a similar “acquire-and-lead” strategy, which could pay off with huge returns in the future. As Wedbush analyst Gil Luria put it, “Oracle has a lot of other verticals and this would be a vertical investment for them, and a sensible move.”
After the Bloomberg article, Micro Systems’ shares were up 16 percent at $67.10 in mid-day trading on the Nasdaq, while Oracle’s were up by 1 percent. Oracle will report its quarterly earnings on Thursday.
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(Image Credit: Håkan Dahlström)