LAN management and antivirus software vendor McAfee Associates has made an "unwelcome" bid for Cheyenne Software, a leading vendor of network backup software.
Analysts say the deal would make sense for McAfee, though Cheyenne has so far declined to accept the unsolicited offer.
"McAfee wants to do more with storage management, and it has indicated it would rather buy than build," says Clare Price, an analyst with Gartner Group, in Stamford, Connecticut. "It would be excellent technology for McAfee, but culturally it would be a very difficult merger for Cheyenne."
McAfee officials say the company had been talking to Cheyenne about a merger since November, but Cheyenne officials characterise the November talks as informal overtures.
"We have never been seriously in discussion with them. This offer is unwelcome," says Glenn Reyer, director of corporate marketing for Cheyenne.
Although Cheyenne officials are refusing to speculate, analysts say the company might be forced to look for a more friendly deal.
"It would be a very difficult merger for Cheyenne," Price says. "They may end up having to look for another suitor."
The proposed deal, a stock swap worth about US$1 billion, would give Cheyenne shareholders McAfee stock in exchange for all Cheyenne shares. McAfee, with 350 employees, had 1995 revenues of US$90 million.
Cheyenne's stock recently took a beating because of poor earnings forecasts. Cheyenne's board has refused the offer on advice from the company's investment bankers.