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Salesforce.com is target of takeover interest

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Salesforce.com is target of takeover interest

Shares of Salesforce.com closed up sharply following a report that the company has hired financial advisers to handle takeover inquiries. Trading was briefly halted in Salesforce.com CRM because of the stock volatility. Shares closed up 12% to $74.65 after Bloomberg said the cloud computing company was approached by a potential suitor. The report did not name the suitor.

1370348751000-XXX-JG-32158-BENIOFF-7-12-2007---JG-32158-BENIOFF-7-12-2007-13Bankers could help Salesforce.com fend off suitors or work out a sale to one of them, Bloomberg reported, citing a person with knowledge of the matter. Salesforce.com has a market value of nearly $50 billion, said S&P Capital IQ analyst Scott Kessler It’s trading at 100 times forward earnings, he added. That would make a takeover the largest ever of a software company, Kessler said.

“It would definitely be pretty significant,” Kessler said. “Obviously at that size, there are only a handful of companies that could presumably do something along those lines.” That has prompted speculation that the unnamed acquirer could be Oracle, Microsoft or SAP. It would also represent an aggressive push into cloud computing for one of those technology giants, each of which have their own customer relationship management software but lag behind Salesforce.com in market share, according to research firm Gartner.

“The space is set to be consolidated and I think the street has been waiting for the game-changer acquisition,” said FBR Capital Markets analyst Daniel Ives. He says an acquisition by Oracle would make the most strategic sense. “Oracle is desperate to establish itself as a leader in cloud computing. Them acquiring Salesforce would be a game-changing acquisition in our opinion. It would fit like a glove,” Ives said. “At the same time Oracle would get one of the core leaders in modern-day technology in Marc Benioff.”