Oppenheimer Removes Sybase (SY) Outperform Rating

Oppenheimer & Co. analysts Shaul Eyal, Manish Hemrajani and Hugh Cunningham removed their $48 per share price target and Outperform rating for shares of Sybase, Inc. (NYSE: SY) after an announcement was made that SAP AG (NYSE: SAP) would acquire Sybase, Inc. for $65 per share in cash because the stock no longer trades on fundamentals.

Although the deal is subject to regulatory approval, the analysts believe that the acquisition is likely to take place.

The Oppenheimer & Co. analysts wrote, "on 5/12/10 after the close, SY and SAP announced an agreement for SAP to acquire SY for $65 per share in cash. SY's board unanimously approved the transaction. The purchase price represents a premium of 56% to SY's 5/11 closing price of $41.57 and a premium of 35% to our prior $48 price target. We think SAP's bid delivers a respectable premium to SY shareholders, and see a strong likelihood that this deal ultimately gets done. We believe this transaction could elevate investor and strategic acquirors' interest in other mobility-focused enterprise communication vendors, including a few under our coverage including SVR and CMVT. On 5/13, we removed our $48 PT and Outperform rating as we believe the shares no longer trade on fundamentals."