Quest Software (Nasdaq:QSFT) is reportedly negotiating to buy Israeli rival Precise Software Solutions (Nasdaq:PRSE) (PRSE) for about $800 million, Israeli daily Yedioth Ahronoth reports. Precise denied the report.

The talks, which began weeks ago, have reached an advanced stage, Yedioth writes.

Quest, which is traded on Nasdaq at a market cap of $1.9 billion, competes with Precise in the niche of software solutions to control and manage databases and applications. It ended the third quarter with revenues of $56.4 million, and a loss of $10.8 million.

Precise's market cap now stands at $660 million. On November 5 Goldman Sachs commenced coverage of the company with a Market Outperformer rating, citing its portfolio of products, partners and growth potential.

On November 14 Precise reported revenues of $14.3 million for the third quarter, compared with $6.4 million for the comparable quarter of 2000.