Shares of Siebel shot up nearly 5% Friday after a published report said the company was in talks with Oracle Corp.
Citing a source and an analyst, the Daily Deal, a financial news publication, reported that the two companies were discussing an acquisition worth up to $5 billion.
San Mateo, Calif.-based Siebel Systems Inc.'s shares were trading over $9 Friday afternoon, up from a close of $8.59 at Thursday's close. The report conceded that talks were preliminary and could break down.
"I wouldn't be shocked, the company's have talked in the past," said Chris Selland, principal analyst at Boston-based Covington Associates. "If Oracle is really trying to roll up and consolidate the industry, and [Oracle CEO] Larry Ellison has said he is, why wouldn't they. With PeopleSoft Oracle said it was after customers and not the technology."
Siebel recently report it currently has more than three million deployed users.
Oracle, based in Redwood Shores, Calif., is still in the midst of integrating technology from PeopleSoft Inc., which it bought late last year for $10.3 billion after a lengthy courtship and antitrust trial. The move would immediately make Oracle the market leader in CRM.
If the deal were to happen, Siebel's CRM technology which is more robust and well regarded than Oracle's would be carried forward, Selland said.
"It more likely they'd throw away some of the PeopleSoft technology or Oracle technology," Selland said. "If I was a Siebel customer I would be less concerned then if I were a PeopleSoft CRM customer, an Oracle customer or a former JD Edwards customer."
Meanwhile, Siebel is still reeling from a poor first quarter. The company reported a loss of $4 million or 1 cent a share. Mike Lawrie, the CEO of Siebel who took over for founder Tom Siebel less than a year ago, stepped down from his position one week after announcing the earnings forecast.
George Shaheen, a member of Siebel's board of directors and former CEO at Accenture, took over for Lawrie.