digibyte – TIBCO hangs out ‘for sale’ notice

SUMMARY:

TIBCO gives the strongest indication yet that it is up for sale.  But is it too rich?

Last month we reported rumors were circulating that TIBCO is on the block. Today, those rumors were confirmed in a press release which said:

Following a detailed evaluation over the past several months, we have determined that it is prudent to undertake a wide review of strategic and financial options to see which alternative or alternatives, including our standalone plans, are in fact the best way to maximize shareholder value,” said Vivek RanadivéTIBCO’s Chairman and Chief Executive Officer.

TIBCO must be feeling pain across all its product lines but is it late in the day? As Martijn Linssen pointed out in comments to my last story:

Integration is the new Operation, and traditional on-premise dinosaurs like SAP and Oracle could do some damage control and facilitate the transition to SaaS by having something like Tibco.

Quite. But TIBCO’s brand of integration got commoditized some years back and while Spotfire has done a great job revitalizing TIBCOs fortunes, the company has slipped up in recent times. It may becoming clear to the TIBCO board that the company can no longer survive in its current form and should therefore be acquired.

Whenever this topic emerged in the past, the problem has always been one of price. TIBCO has tended to think it is worth far more than potential buyers are willing to pay. The fact the stock price is up 6% now may be encouraging but the $3.45 billion market cap is a long way off the rumored $5 billion price tag the board would like to see.

As always in these circumstances, TIBCO needs to be careful. Potential events of this kind create uncertainty and while the company reiterates its support for customers and innovation, buyers will not be so easily persuaded.