Investors bet on Netezza bidding war after IBM offer

By David Goldman, staff writer


NEW YORK (CNNMoney.com) -- IBM agreed on Monday to buy analytics firm Netezza for $1.7 billion, or $27 a share, but investors quickly sent the company's stock up above the bid price -- a signal that traders believe a bidding war could be looming.

Shares of Netezza (NZ) ended Monday trading up 15%, at $28.27.

Data analytics is a fast-growing business, and big tech firms like IBM, Hewlett-Packard (HPQ, Fortune 500), and Oracle (ORCL, Fortune 500) are all trying to capitalize on that growth. Since 2006, IBM has bought 23 analytics companies, spending more than $12 billion in the process. That helped its analytics business grow 14% last quarter.

The large stores of cash at the top tech companies, combined with the recent wave of tech mergers and acquisitions in high-growth areas like analytics, storage and social media, have investors betting that an IBM rival might try to make a better offer. HP and Dell (DELL, Fortune 500) recently fought out a weeks-long bidding war for storage company 3PAR that ended with a bid worth nearly double the initial offer.

IBM (IBM, Fortune 500) said it decided to buy Netezza because of the company's ability to quickly and inexpensively help clients gain insights into their business information. Netezza also brings an impressive compliment of clients, including NYSE Euronext and Virgin Media.

"IBM is bringing analytics to the masses," said Steve Mills, senior vice president of IBM's software and systems group. "Netezza strongly complements our business analytics capabilities and client base."

The deal is part of IBM's stated plan to spend $20 billion on acquisitions through 2015.  To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 16,614.81 215.14 1.31%
Nasdaq 4,419.48 103.41 2.40%
S&P 500 1,941.28 37.27 1.96%
Treasuries 2.21 0.03 1.24%
Data as of 12:26am ET
Company Price Change % Change
Apple Inc 102.47 2.71 2.72%
Bank of America Corp... 16.60 0.34 2.09%
The Coca-Cola Co 40.68 -2.61 -6.03%
Regions Financial Co... 9.26 0.10 1.09%
Yahoo! Inc 40.18 0.90 2.29%
Data as of Oct 21

Sections

Yahoo was in the spotlight Tuesday as it released its third-quarter results, its first earnings release since the Alibaba IPO. More

Startups focusing on "ag tech," or agricultural technology, are gaining the attention of farmers and investors More

Foreign workers, lured by false promises of good jobs and benefits in America, soon find themselves enslaved in plain sight as victims of labor trafficking, a report from the Urban Institute finds. Here's how it can happen. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.