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Websense Surges On Acquisition Rumor

SAN DIEGO ( TheStreet) -- Shares of Websense (WBSN) surged Wednesday after the Wall Street Journal reported that the security specialist may be on the block.

Citing people familiar with the matter, the Journal said that Websense is exploring a sale with the help of investment bank Qatalyst Partners, which also worked on HP's (HPQ - Get Report) acquisition of Palm and EMC's (EMC) purchase of Data Domain.

Websense could command a price tag of around $1 billion, according to the sources, who explained that the firm may decide against a sale if offers do not meet its expectations.

Websense shares climbed $2.42, or 11.85%, to close at $22.85 on Wednesday, reversing the broader retreat in tech stocks that saw the Nasdaq lose 1.89% over the session.

Rumors of Websense as an attractive acquisition target are not new, and a deal would continue the recent spate of security M&A that saw Intel (INTC) spend $7.7 billion on McAfee and HP grab ArcSight for $1.7 billion.

HP, which rolled out its long-term strategy earlier this week, has been touted as a possible WebSense suitor. The tech bellwether is expected to make more acquisitions in both software and security, particularly after HP CEO Leo Apotheker highlighted the security challenges of cloud computing during an event in San Francisco earlier this week.

Websense, which has a market cap of $928 million, sells software for securing Web, email, mobile and social networking data. The Symantec (SYMC) rival lists Microsoft (MSFT) as a partner.

Neither Websense nor Qatalyst has yet responded to TheStreet's request for comment on this story.

--Written by James Rogers in New York.

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