M&A Talk Still Swirling Around ArcSight

ArcSight is rumored to be holding an "all-hands-on-deck" meeting with employees, prompting yet more M&A speculation.
Author:
Publish date:

Story updated with additional information on rumored ArcSight meeting with employees.

CUPERTINO, Calif. (

TheStreet

) --

Acquisition rumors continued to swirl around ArcSight (ARST) on Thursday

, a week after a news report

first surfaced saying the company is on the auction block.

An industry source told

TheStreet

that the company is holding an "all-hands-on-deck" meeting with employees today, prompting

speculation

that this could be related to potential M&A. Subequently, the source added that the meeting may now be pushed out until Friday. ArcSight,

which reports its first-quarter results after market close

, has yet to respond to

TheStreet's

request for comment.

Last week the

Wall Street Journal

reported that ArcSight has put itself in the shop window. Citing people familiar with the matter, the Journal said that potential buyers, including

Oracle

(ORCL) - Get Report

and

Hewlett-Packard

(HPQ) - Get Report

could pay up to $1.5 billion for the company.

EMC

(EMC)

,

IBM

(IBM) - Get Report

and

CA

(CA) - Get Report

are also possible purchasers, the

Journal

added.

ArcSight shares surged on the speculation, hitting a new 52-week high of $39.74 on August 27. The

WSJ

report, which theorized a deal could happen in the next couple of weeks, said ArcSight expects to fetch $40 a share.

One of

TheStreet.com's

top security stocks for 2010

ArcSight makes security management and compliance software, and was recently

cited as one of the sector's most attractive acquisition targets

. The

TheStreet's

'Breakout Stocks' portfolio has described ArcSight as "one of the most compelling secular growth stories in the market."

ArcSight

only went public in 2008

, but has already made a big name for itself, putting out consistently impressive quarterly numbers.

The company's CEO Tom Reilly recently

told TheStreet

that ArcSight is also on track to reach its target of 18% to 20% operating margin in fiscal 2012.

The software maker

has been getting plenty of love on Wall Street

and analysts expect the company to post first-quarter revenue of $45.53 million and earnings of 13 cents a share. ArcSight reported sales of $34.6 million and earnings of 9 cents a share in the same period last year.

ArcSight's stock rose 64 cents, or 1.69%, to $38.47 in Thursday afternoon trading, outpacing the broader advance in tech stocks that saw the Nasdaq rise 0.45%.

--

Written by James Rogers in New York.

>To follow the writer on Twitter, go to

http://twitter.com/jamesjrogers

.

>To submit a news tip, send an email to:

tips@thestreet.com

.