Microsoft to Buy Rational and/or Borland?

oblivious writes "I got this in e-mail this evening: According to a Reuters report that crossed the wires late today, the speculation is that Microsoft will make bids to buy both Rational and Borland. Shares of both Rational and Borland are up on the news, and so far both IBM and Microsoft have no comment on this report." We recently ran a story about IBMs planned purchase of Rational. Chris didn't make clear in here - it's not that Microsoft might buy both, but that Borland might be a likely target, if a bid to buy Rational out from under IBM fails, which it is likely too. Rational and IBM have signed the substantive portion of the agreement already, so any sort of counter bid would have some fun legal consequences for all involved.

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Inner Circle mail

[the_rev_matt]

To Our Valued Inner Circle Customers:

I am delighted to tell you that IBM and Rational Software have announced a
definitive agreement for IBM to purchase Rational. This is a very exciting
time for both companies and builds on the extensive business relationship
we have had for over 20 years.

You and other Inner Circle customers are telling us that you need to
further integrate your application development environment. This
acquisition will allow IBM to give you the tools to develop, integrate and
manage your business processes. Rational's software development platform
-- including software engineering best practices and products for analysis,
modeling, development, testing and configuration management -- complements
IBM's WebSphere application development tools to help customers develop
higher quality software in less time.

Rational's solid leadership capabilities in application lifecycle
management tools, along with IBM's industry-leading e-business
infrastructure products, makes for a winning combination. IBM and Rational
share a common objective in providing customers with best practices, tools,
and services designed to improve individual developer productivity and
overall application development efficiency. Customers can begin using
Rational's solutions at any stage of e-business adoption, which can
increase the productivity and success of your development projects.

IBM provides the most comprehensive set of e-business technologies and
product offerings in the industry. IBM middleware interoperates across the
broadest set of platforms used in enterprises today. We will continue to
develop the Rational solutions for multiple platforms, including .Net,
J2EE, Linux and real-time/embedded systems. The next logical progression
of e-business adoption is to systematically integrate systems and
applications across enterprises, which is where Rational offers great value
when combined with IBM software.

IBM intends to retain the Rational brand and establish the Rational
division within IBM Software Group led by Mike Devlin, Rational's current
CEO. As with other business acquisitions of this nature, this one will
require government regulatory approval and the agreement of Rational's
shareholders.

IBM and Rational are impressive as separate entities. Together, with our
complementary e-business technologies and commitment to customer success,
we can provide even greater value to you.

Thank you for your continued support and we look forward to expanding our
relationship with you in the future.

Best regards,