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Sybase shares soar 55% on SAP takeover

By David Goldman, staff writer


NEW YORK (CNNMoney.com) -- Shares of Sybase skyrocketed Wednesday following SAP's offer to buy the business software maker for $5.8 billion in cash.

Sybase's (SY) stock jumped 35% during normal trading hours, and leapt another 15% after hours.

The deal will help Germany's SAP (SAP) keep pace with arch-rival Oracle (ORCL, Fortune 500), which said it is stealing customers away from SAP.

Dublin, Calif.-based Sybase makes database software, including data analysis programs for financial institutions. SAP would also be acquiring new technologies from Sybase, including providing mobile access to databases. SAP's core business is software for corporate payrolls and customer relations.

Sybase has recently started to shift out of the enterprise database space, where it was losing to Oracle, IBM (IBM, Fortune 500) and Microsoft (MSFT, Fortune 500), and started carving out a mobile niche. Last year, Sybase inked a partnership with SAP around its mobile technology. Since then, many analysts have suggested that SAP just buy the company outright.

"With this transaction, SAP will dramatically expand its addressable market by making available its market-leading solutions to hundreds of millions of mobile users," said Bill McDermott, co-CEO of SAP, on a conference call with analysts. "This is a game-changing transaction for SAP and Sybase customers."

The deal values shares of Sybase at $65 a share for a 44% premium over the three-month average value of the company's stock price. Sybase will operate under the SAP name, but Sybase's current staff will continue to run that business.

"By combining the market leader in enterprise applications with the market leader in enterprise mobility, companies around the world will be able to run their business from many devices," said John Chen, Sybase's chief executive, on the call.

The German software giant's CEO Leo Apotheker stepped down in February following the company's first annual sales decline in seven years. SAP replaced Apotheker with two co-CEOs, McDermott and Jim Hagemann Snabe, who announced earlier this year that they would look to acquire businesses that could help grow their company.

Shares of SAP fell 1% Wednesday and an additional 2% after hours. To top of page

Index Last Change % Change
Dow 18,570.85 53.62 0.29%
Nasdaq 5,100.16 26.26 0.52%
S&P 500 2,175.03 9.86 0.46%
Treasuries 1.57 0.00 0.32%
Data as of 5:08am ET
Company Price Change % Change
Chesapeake Energy Co... 5.39 0.42 8.45%
General Electric Co 32.06 -0.53 -1.63%
Bank of America Corp... 14.38 0.11 0.77%
Southwestern Energy ... 14.47 1.26 9.54%
PayPal Holdings Inc 37.42 -2.71 -6.75%
Data as of Jul 22
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