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'Increasing Chance' Of Other Bidders For Veritas

Merrill said Veritas shares will show near-term strength on the speculation of another bidder emerging and channel checks that show the company appears to be "modestly ahead of prior expectations." The research firm said other potential acquirers of Veritas include Oracle (nasdaq: ORCL - news - people ), Microsoft (nasdaq: MSFT - news - people ), IBM (nyse: IBM - news - people ), EMC (nyse: EMC - news - people ), and Hitachi (nyse: HIT - news - people ). Oracle has competed with Veritas in clustering, Merrill said, and noted that Microsoft has a backup product set for next year called Data Protection Server, "but we doubt Microsoft would be interested in Veritas, as Veritas has a high Unix focus." IBM is the second-largest provider of backup software, and has shown a proclivity to acquire software companies, especially infrastructure companies, the firm said. EMC, Merrill said, is running out of large-enough storage software companies to acquire, and acquiring Veritas would allow EMC to reach 30% of revenue from software. "Veritas would make a good fit for Hitachi," said Merrill, adding that a bid by Symantec "could result in a competitive bid by Hitachi or some other company." Merrill, which rates Veritas at "buy," raised the price objective on the company to $30 from $27.
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