Cisco Systems Inc held talks with Splunk Inc about a takeover that could have been its largest deal ever, but discussions fell apart in the past few weeks, people familiar with the situation have said.
The companies are no longer in talks about a deal, and it is unclear whether Cisco is still interested in Splunk, the sources said, asking not to be identified because the matter is private.
US$20 BILLION BID
The Wall Street Journal reported on the discussions, saying that Cisco offered more than US$20 billion for the software company.
That sent shares of Splunk up as much as 16 percent in late trading on Friday.
Cisco and Splunk declined to comment.
Cisco, which is scheduled to report its latest results next week, has been expanding its software and services in an attempt to rely less on its hallmark networking hardware.
The company gave a lackluster forecast for revenue in November last year, attributing it to a shortage of components.
The Silicon Valley giant has traditionally generated the bulk of its revenue from equipment that forms the backbone of computer networks, but that has been changing. Revenue from subscriptions and software is expected to reach 50 percent of Cisco’s total by fiscal 2025, the company said in September.
A Splunk deal would have been Cisco’s largest acquisition yet, well above its takeover of Scientific Atlanta Inc for about US$7 billion in 2006.
Splunk last year announced that private equity firm Silver Lake Management LLC was investing US$1 billion in the company.
News of the deal sent Splunk shares as high as US$133.25.
The stock closed at US$114.51 on Friday, down about 1 percent so far this year.
Cisco slipped in late trading, falling less than 1 percent. It was down 15 percent so far this year.
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