Teradata jumps on SAP acquisition speculation

Shares of data warehouse management company Teradata jumped nearly 7 percent in trading Tuesday, following an analyst report that the company would make a good fit with enterprise software applications behemoth SAP.

And while JMP Securities analyst Pat Walravens, notes that SAP has "hinted in recent weeks" it may be considering another acquisition and he believes Teradata would make a good fit, SAP sources say no such transaction is in the immediate works.

Teradata, which has a market capitalization of $3.94 billion, would need full approval from SAP's supervisory board to move forward in entering into serious negotiations and that has not happened, according to sources familiar with the board's thinking.

That's not to say informal discussions haven't happened at an executive level, but nothing has risen to a level of seriousness at this current point, sources said.

Case in point, SAP's $6.8 billion acquisition of business intelligence software developer Business Objects announced last year was brought before the supervisory board roughly six weeks before that deal was signed, sources said. The next supervisory board meeting is in late October.

Teradata closed at $23.59 a share during the market's regulator session, up 6.74 percent from the previous day.

Representatives for SAP, Teradata and SAS all declined to comment, noting their respective companies do not comment on "speculation."

SAP executive and former Business Objects' CEO John Schwarz has previously told his company's leadership that he believes the area of advanced analytics is one that's worth filling with an acquisition.

Teradata, which Walravens notes in a research report would fill the data warehouse management market where SAP lags, also offers advanced analytics. But one company that solely focuses on that area is privately held SAS Institute.

However, SAS Institute is also a large corporate titan with $2.15 billion in revenues last year. And the company's founder and chief executive, Jim Goodnight, is happy with the company's progress over the last 30-plus years and wishes to keep it independent, an SAS spokeswoman said.

One thing to note, however, if SAP were to acquire Teradata, it could possibly strike a tighter relationship with SAS. In March, SAS announced the capability to bundle its analytics software within the Teradata managed servers, in an effort to speed the analytical process. While that partnership is non-exclusive, Teradata is currently the only company with which SAS has such an arrangement, a SAS spokeswoman said.