Does An Oracle-Splunk Merger Make Sense? Wall Street Split

Among unconfirmed market chatter of a Splunk Inc (NASDAQ: SPLK) acquisition by Oracle Corporation (NYSE: ORCL), Wall Street has responded.

Splunk is sitting at a market cap of $8.81 billion and was trading up around 1.5 percent on Friday morning.

Benzinga spoke with two analysts about the rumor.

Steven Koenig, Wedbush

Koenig believes that the deal would make sense for Oracle, as the California-based company would benefit from consolidation within the tech and data space.

He says that Splunk's highly differentiated big data processing software is in high demand and thus wouldn't be surprised if multiple large tech companies were bidding to acquire the firm. However, he's skeptical of whether Splunk executives would see now as the correct time to sell, since they have a "very robust growth outlook ahead of them."

J Derrick Wood, Susquehanna Financial Group

Wood, conversely, thinks that a Splunk buyout would be an unlikely move for Oracle. According to him, the company is very disciplined with regard to the amount of money it is willing to spend on acquisitions.

"With Splunk trading at a pretty high premium right now," he says, the company is outside of Oracle's valuation parameters. "It's just not Oracle's style."