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Renewed Buyout Talk Lifts Jive Shares

Shares of Jive Software jumped during the past few days on renewed reports that the social business provider is seeking a buyer.

Talk of a takeover has risen repeatedly since last May when Bloomberg News reported SAP passed on the deal. The latest report came on Tuesday when Re/code writer Arick Hesseldahl reported the company has been seeking a sale over the past several months with the help of the investment bank Qatalyst Partners, which is led by Frank Quattrone.

Company officials were mum. "We don't comment on rumors," said investor relations spokesman Brian Denyeau. Company spokeswoman Amanda Pires added nothing.

Months on the Market

"Quattrone has been shopping Jive around for about five months," an unidentified source told Re/code. Various news reports since last summer have suggested possible buyers could include Oracle, Workday, IBM and others — all without confirmation.. 

The mere hint that a sale could be in the offing was enough to lift the company's languishing shares by about 12 percent within two days of this week's report. It closed Thursday at $8.96 after touching $9.39 earlier in the session.  About 1.3 million shares changed hands on Thursday, well above the average daily volume of 816,451. The stock traded at a 52-week high of $18.48 last summer, but sank to a low of $7.11 in mid-February after disappointing earnings.

Rob DeFrancesco, editor of Tech-Stock Prospector and a CMSWire contributor, said Microsoft's $1.2 billion acquisition of Yammer dampened interest in Jive.

"Jive is so small — 2014 revenue is expected to be around $173 million — that a sale wouldn't move the needle for any of the big vendors," DeFrancesco explained in an email.

"With revenue growth expected to average around 18 percent this year and next — good, but not great — I think the upside valuation any potential buyer would be willing to pay is somewhat limited," he said. "A 4.5X multiple on the estimated 2014 revenue would get the market cap up to around $779 million vs. $626 million today."

At its SharePoint conference in Las Vegas last week, Microsoft repeatedly showcased Yammer as a core tool in building social business in companies using SharePoint and Office365.

 
 
 
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