The Ratings Game: IBM’s record offer for Red Hat leaves analysts doubtful, but still speculating on bidding war

Red Hat Inc.’s stock soared Monday after International Business Machines Corp. promised to pay a premium of more than 60% for the open-source software company to boost its hybrid-cloud service. Even with the high price, analysts speculated that a bidding war may be in the works, while also questioning whether the marriage would be beneficial.

Red Hat RHT, +45.69% shares touched an intraday high of $174.48 and recently were trading 43% higher at $166.36 Monday, while IBM IBM, -4.80% shares declined 2.6% to $121.49, after touching an intraday low of $118.30. On Sunday, IBM said Red Hat agreed to be acquired for $190 a share in a cash and debt deal with an enterprise value of about $34 billion, which would reportedly be a record for a software acquisition.

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