Sybase on the Blocks?

Sybase on the blocks? An article appearing in the Saturday Dec 29 2007 edition of the Wall Street Journal suggested that Sybase may be up for sale, its second-largest institutional investor, Sandell Asset Management, suggesting there would be “significant strategic interest” in acquiring Sybase, and that a “reasonable valuation” in a sale would be $30 to $39 a share. Sybase is currently trading around $24. The article refers to a possible proxy fight, meaning a fight over who controls the board.                                                                                                                               Flash back to the early 90’s, when many commentators –and more telling, many in big business- felt that Oracle had fallen behind technically to Sybase. Indeed in 1990-1993, Sybase was the fastest growing database company and the database industry’s darling vendor, but soon fell victim to its merger mania. For example Sybase’s 1993 merger with PowerSoft resulted in a loss of focus on its core database technology. And also in 1993 Sybase sold the rights to its database software running under the Windows operating system to Microsoft Corporation, which now markets it under the name “SQL Server.” All that said the legacy of Sybase’s foothold in the financial community remains relatively firm, Oracle nonetheless making inroads. Will Oracle step up to the plate and become an acquirer of Sybase? Who knows for sure? It would be a romantic play from Oracle’s standpoint, giving Larry Ellison the satisfaction of acquiring a (once leading) database company. Still, Sybase said on Dec 28 that its record of  ”solid overall financial execution” includes “double-digit returns generated over the past three years through revenue growth, margin expansion, targeted accretive acquisitions, and stock repurchases.”

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