Cyberark Spikes 18% Following Merger Chatter; Oppenheimer Assigns 'Low Probability' On Transaction

Shares of Cyberark Software Ltd (NASDAQ: CYBR) surged higher by nearly 20 percent early Wednesday morning following a report that the company is a potential acquisition target.

Haaretz, an Israeli-based publication, reported that Check Point Software Technologies Ltd. (NASDAQ: CHKP) is in talks to acquire Cyberark.

Both Check Point Software and Cyberark are based in Israel.

Reuters noted that Check Point Software has been active on the M&A front and acquired two small Israeli start-ups in 2015: Hyperwise and Lacoon Mobile Security.

Oppenheimer: 'Low Probability' Based On Check Point's Historical M&A Strategy

Shaul Eyal of Oppenheimer briefly commented in a note that Check Point Software has historically pursued smaller-sized acquisitions. The analyst noted that both of the company's acquisitions in 2015 combined for a cost of less than $200 million.

Cyberark's market cap as of Tuesday's market close was $1.20 billion.

Eyal continued that while Check Point holds $3.6 billion of cash on its balance sheet, an acquisition of Cyberark "would certainly mark a deviation" from its strategy even though "financing such a hypothetical transaction is no hurdle."

"While we never say never, we currently assign such a transaction a low probability based mainly on Check Point Software historical M&A strategy," Eyal wrote before adding "history also has a tendency to rewrite itself."

Shares traded recently at $45.13, up 19.1 percent.