Splunk Stock Surges on Report of $20 Billion Cisco Buyout Offer

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Shares of

Splunk

were rising sharply Monday on a report that 

Cisco Systems

made a takeover offer of more than $20 billion for the data analytics software company.

Cisco (ticker: CSCO) made the offer recently and the companies are not in active talks, The Wall Street Journal reported on Friday, citing people familiar with the matter.

Splunk

(SPLK) stock jumped as much as 17% in after-hours trading following the report. The stock rose 8.5% to $124.22 on Monday.

Cisco and Splunk didn’t respond to requests for comment.

In November, San Francisco-based Splunk announced that Chief Executive Doug Merritt had stepped down from the role after six years following a series of disappointing earnings reports. The company named Chairman Graham Smith as interim CEO.

Founded in 2003, Splunk makes software used by companies’ information technology and security operations to monitor and analyze data. Last year, Splunk announced that private-equity firm Silver Lake was investing $1 billion. 

Cisco, which is set to report its latest results this week, has been expanding its software and services. The company already has a data-security partnership with Splunk.

Shares of Cisco fell 1.4% on Monday. The stock has dropped 16.1% so far this year.

A takeover of Splunk would have marked Cisco’s biggest acquisition to date, surpassing its 2006 acquisition of cable TV equipment maker Scientific Atlanta for about $7 billion.

Analysts at Evercore said they believe the reported bid “helps illustrate why we see SPLK as an attractive risk/reward idea in a very choppy software tape. “

The analysts said investors “will debate what the ‘more than’ means as SPLK is essentially trading at $20 billion at current levels, but we believe that SPLK’s growing cloud business and blue chip customer base are not fully reflected at current levels.”

Write to Lina Saigol at [email protected]