Investors bet on Netezza bidding war after IBM offer

By David Goldman, staff writer

NEW YORK ( -- 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

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