German enterprise software company SAP AG (
) said late Wednesday that it will acquire database and mobile
software maker Sybase (
) for about $5.25 billion in cash.
The $65 per-share offer represents a nearly 57% premium over
Sybase's Tuesday closing price of $41.57.
The acquisition is designed to help SAP keep pace with its main
rival in the industry, Oracle (
) . In pursuant to the agreement, Sybase will remain a standalone
unit. The deal is expected to close in the third quarter of this
SAP said it will finance the deal with cash on hand, as well as
a 2.75 billion euro loan from, which has been arranged by Barclays
Capital and Deutsche Bank.
SAP shares fell 40 cents, or -0.9%, in premarket trading
The Bottom Line
We have avoided shares of SAP since our early June 2008 coverage
began, when the stock was trading at $53.55. The company has a
1.11% dividend yield, based on last night's closing stock price of
$44.90. The stock has technical support in the $38-$40 price area.
If the shares can build momentum on this morning's news, we see
overhead resistance around the $48-$50 price levels. We would
remain on the sidelines for now.
SAP AG (
) is not recommended at this time, holding a Dividend.com DARS™
Rating of 3.4 out of 5 stars.
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, as well as a detailed explanation of
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