Bothand opponents of the deal say there is little chance investors will reject the all-stock transaction. With no alternative deals in sight for the companies, analysts say, shareholders essentially have no choice but to accept the deal marrying Symantec, a Cupertino, Calif., maker of consumer antivirus software, and Veritas, a Mountain View, Calif., storage software vendor.
"If there were so many anxious buyers waiting in the wings, Siebel and BEA would have been taken out already," said Richard Williams, an analyst with Garban Institutional Equities, referring to two other software giants around which acquisition rumors have circulated.
Symantec's CEO talks
up the deal that could
make his company
After sliding steadily for months, the stocks ofrecently have recovered. Symantec shares traded at $27.38 the day before the deal was announced, and fell as low as $18.01 on April 27. On Wednesday afternoon they traded at $22.44.
"The reason the stocks are up is uncertainty in the deal is starting to erode," said Williams, who predicts the rally will be short-lived. "There is a lot of execution and integration risk--lots of things could go wrong; few things could go right."
Michael Cohen, director of research at Pacific American Securities, echoed that sentiment. "I see it as a fit that has little synergy."
Like many analysts, Williams and Cohen view the acquisition as a defensive play by Symantec to counter Microsoft's move into the consumer antivirus market, rather than a genuine engine of growth.
"The motivation was largely for Symantec to change the direction of its business," Cohen said.
will squeeze pure players, such as Symantec, the analysts said.
"The only reason (Microsoft) won't offer it completely for free is to keep the Justice Department off their tail," said Williams, who foresees Symantec ultimately focusing on selling software to corporate customers rather than consumers.
One risk arbitrageur offered a more positive take. "The market finally understands the logic" behind the deal, which he said will allow Symantec to enter a more stable, if slower-growth, technology sector.
In a recent meeting with investors, Symantec chief executiveand Veritas CEO Gary Bloom were calm about the pending vote. "I've never seen two more unfazed people," the arbitrageur said.
Months of speculation that the deal might derail turned out to be "little more than market fear," he added.
If Symantec closes the deal in July as scheduled, the company is likely to make additional acquisitions ranging from roughly $200 million to $500 million, the arbitrageur predicted.
"We'll start to see small tuck-in deals for niche products within the next six months."
In a regulatory filing Monday, Symantec and Veritas said they expected to complete the transaction on July 2. When the acquisition was announced Dec. 16, the companies said they expected shareholders to vote in late April or early May and that the merger would close by the end of June.
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