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Consolidation Contagion Spreads?

June 10

Now, on the heels of the Oracle-PeopleSoft-JD Edwards imbroglio, comes talk that Siebel Systems may be takeover bait.

With declining sales and a stock down 90% from its dotcom high of nearly $20, Siebel still commands a prominent place among CRM software vendors. The company's sales, now at $1.7 billion, are 20% lower than last year during which time it lost about $36 million.

Acting as a magnet to would-be acquirors is Siebel's treasury: about $2 billion in cash and short-term investments. Deduct this value from the company's $5.2 billion marketcap to get a sense of the company's net value -- about two times sales. Not a bad price for a market leader if one can restore sales growth or at least profitability.

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