Technology

Were Salesforce.com Buyout Rumors Driven by Oracle Raising $10 Billion?

As far as the buyout rumors themselves, Bloomberg first reported that Salesforce.com was hiring bankers to field takeover inquiries, then that Salesforce is working with financial advisors after a takeover approach. And investors can take comfort about the source being “unnamed people with knowledge of the matter.” Just for the record, those unnamed people are constant sources of rumors — and many of those rumors never come to fruition, even though some do.

The use of proceeds section of the offering said:

Oracle intends to use the net proceeds of the offering for general corporate purposes, which may include stock repurchases, payment of cash dividends on its common stock and future acquisitions. The company’s filings showed that Oracle already had $43.77 billion in cash and $98.8 billion in total assets. At the same time, it had approximately $50.3 billion of total liabilities.

Oracle’s filing also said: “we had the ability to borrow up to an additional $3.0 billion under our commercial paper program and $3.0 billion under our revolving credit facility.”

As far as Microsoft being a potential acquirer, Benioff was just at the Microsoft Build developers conference on Wednesday.

Is it possible that Microsoft is going into a bidding war against Oracle to buy Salesforce.com?

Salesforce.com closed up 11.6% at $74.65, against a 52-week range of $49.18 to $78.46, and against a consensus analyst price target of $75.57.

Oracle closed up 0.5% at $44.73, in a 52-week range of $35.82 to $46.71, and it has a consensus price target of $46.28.

Microsoft closed down by 0.2% at $49.06. Its 52-week range is $38.51 to $50.05, and the consensus price target is $47.61.

ALSO READ: Dividend Hike vs. Buyback: Is IBM Finally Getting It Right?

As a reminder, anything is possible when it comes to the rumor mill and technology giants. Sometimes it is still hard to believe what comes out of that rumor mill.

The only official press release from Salesforce.com on Wednesday indicated that the company’s first-quarter fiscal 2016 results will be released on Wednesday, May 20, 2015, after the close of the market.