For Sybase, It's Buyback or Buyout

Hewlett-Packard(HPQ) could also be a buyer, but only if it were first to buy BEA, Phifer said Monday. If H-P were going in that direction, "we probably would have seen a bid today" for BEA.

Ultimately, Sandell may be satisfied with a speedier and more generous share repurchasing program. For the first six months of 2007, Sybase bought back nearly $59 million in stock, leaving $191 million in its program for the second half of the year, according to the company.

But the buybacks so far have done little more than use incremental cash generated by the company -- and Sybase's cash balance continues to grow, Sandell stated.

At the end of June, Sybase had $658 million in cash and short-term investments, according to the company. And its full-year cash flow from operations is expected to be $195 million to $205 million.

While a bigger repurchasing program doesn't preclude a move on Sybase by a larger company, it would raise the share price and make it a more expensive target.

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