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Brocade targeted by M&A rumor mill
Shares jump on IBM speculation, though some see Dell making move

By Benjamin Pimentel, MarketWatch
SAN FRANCISCO (MarketWatch) — The tech M&A fever spewed more heat Wednesday as shares of Brocade Communications rose sharply on speculation of a potential buyout deal with IBM Corp.

Brocade (NASDAQ:BRCD) shares were up 61 cents, or 10.8%, to close at $6.26 on rumors, including a couple reported in Barron’s, that Big Blue (NYSE:IBM) was considering acquiring the networking gear maker that has long been considered to be a potential target.


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Some analysts reached by MarketWatch downplayed a possible IBM-Brocade marriage, but noted that it definitely is buying season for major tech players hoping to boost their product portfolios at a time when the lines in the data center market are blurring.

Wedbush analyst Kaushik Roy said Brocade is surely an attractive acquisition target, but sees Dell Inc. (NASDAQ:DELL) as the more motivated buyer.

“It makes a lot more sense for Dell to buy Brocade than IBM,” he said in an interview. “With Dell, it’s a no-brainer. If Dell has half of a brain, they should be taking Brocade out right now.”

That’s because, of the big tech players vying for a piece of lucrative corporate space, Dell still has a relatively weak product portfolio, especially in networking and data storage.