Speculation has emerged that Microsoft’s planned US26.2bn tie-up with LinkedIn could spark more tech-sector takeovers, with Sage Group plc (LON:SGE) a potential winner or loser in any deal.
The next big merger could be a takeover of cloud computing specialist NetSuite Inc (NYSE:N) or Ultimate Software Group Inc. (NASDAQ:ULTI), according to a Bloomberg report.
And the speculation has continued, with market gossips tipping London-listed accountancy software firm Sage to be among those eyeing Netsuite, which develops business management software systems.
But they say Sage is likely to be up against big competition for the California-based firm, with other possible suitors said to include IBM (LON:IBM), Alphabet Inc’s (NASDAQ:GOOG) Google, Salesforce.com Inc and SAP SE (ETR:SAP).
Oracle Corporation (NYSE:ORCL), which already owns 40% of NetSuite, is also thought to be watching the situation closely.
Rumour has it that some of the interested parties have even approached major NetSuite shareholders, who are said to be unlikely to accept less than US$120 a share.
But sector watchers reckon Sage could lose out if Oracle buys the whole of NetSuite, sells it to a rival or enters a joint venture with a new shareholder.
A market source said: “If Oracle or someone else buys NetSuite, it’s not good news for Sage.”
Sage said late last year that it still had much to do in its restructuring despite reporting higher revenue and subscriptions.
Sage, whose current chief executive has been pushing through organisational and product changes, is focusing 87% of research and development spending on core growth products.
It has also launched a shake-up to save at least £50mln a year by the end of its 2016 financial year.
Shares in Sage were 8.7p lower at 595p at the London close on Thursday. Netsuite’s stock fell $0.87 to $77.90 at New York's midsession. Ultimate Software shares were $0.36 higher at $205.41.
A spokesman for Sage said "no comment on market rumours".
Proactive Investors also contacted Netsuite for comment but none was forthcoming at presstime.