Brean Says To Ignore The CRM Story

In a report published Wednesday, Brean Capital analysts maintained a Hold rating on

, after a Bloomberg report mentioned that the company was being approached by a potential buyer. In the report Brean Capital noted, "We believe that it may in fact be accurate that Salesforce.com has been approached by a buyer, however, we also have found that such a deal would be unlikely on both price/valuation - which prices most of the named buyers out of the market - with a Founder/CEO unwilling to sell without a substantial premium - and more importantly, after working with M&A lawyers, on regulatory issues." "We also question that CRM has any interest in selling itself, and note that the co. is closing out the seasonally tough Q1 today, and is unlikely to respond until numbers are in," the analysts said. salesforce.com's current stock valuation is quite high and its acquisition may prove to be quite expensive. The analysts believe that a potential deal "may be prohibitively expensive for all but two players in the market:" A prospective deal between salesforce.com and

or

will face regulatory issues. Together Oracle and CRM would command over 60-65 percent of the Customer Relationship Market. This would "certainly raise regulatory red flags in that it could result in harmful pricing for software customers globally," the analysts wrote. Microsoft and Salesforce.com would also face regulatory issues, as the combined entity would command almost 50 percent of the Sales Force Automation Software market.