Radware Ltd. (Nasdaq:RDWR), a Israel-based technology company that develops solutions to help Internet networks run more efficiently, has jumped more than 20% today to more than $39/share after Israeli newspaper Calcalist reported Riverbed Technology, Inc. (Nasdaq:RVBD) was in negotiations to acquire the company. Calcalist reported the bid values Radware at $895 million, or $47/share.
The Radware board, according to the report, will consider in the next several days whether to accept the offer, which is worth $2 per share more than the bid Hewlett-Packard Company (NYSE:HPQ) reportedly made for the company earlier this year. Keep in mind that another Israeli newspaper, Globes, reported the potential bid from Hewlett-Packard, but nothing ever materialized. The previous fake-out could explain why today the stock has only spiked less than halfway to the reported takeover price. The stock has more than doubled this year as higher demand has driven tremendous bottom line growth. The takeover report came Monday as Radware announced that an affiliate of South Korean conglomerate SK Group plans to use its application switches to build a Web portal service.
The takeover would be part of a growing trend of consolidation in the network infrastructure sector as customers look for more one-stop shops, Rodman & Renshaw analyst Ashok Kumar noted this morning via the Wall Street Journal. Riverbed itself has been mentioned as a takeover target in the past, with reports dating back to 2009 identifying Cisco Systems, Inc. (Nasdaq:CSCO) and Hewlett-Packard seen as potential fits. Keep an eye on the sector as consolidation looks set to increase.
Scott Redler commented on Radware earlier this year on CNBC here.
*DISCLOSURE: Long RVBD
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