On Friday, shares of the world’s leading hosting company, Rackspace Hosting (NYSE:RAX) , are soaring, up almost 12% in midday trading after the company is apparently in talks with private equity firm Apollo Global Management (NYSE:APO) regarding a takeover offer.
According to Reuters, who cite people familiar with the matter, Apollo Global is reportedly negotiating a price over $3.5 billion to acquire Rackspace. Since it announced it was working with Morgan Stanley (NYSE:MS) about a sale two years ago, the hosting company has been exploring a sale many times. The sources, however, cautioned that these latest talks may not result in a deal.
Apollo Global, who is based in New York City, has traditionally bought stakes in the communications, consumer, energy, healthcare, industrial, media, retail, and services industries, but has been trying to invest in the technology sector for some time now.
Rackspace has had trouble growing, as big tech giants like Microsoft Corp. (NASDAQ:MSFT) and IBM Corp. (NYSE:IBM) have made aggressive efforts in hosting and cloud services industry, but the company has made impressive gains in the business over the past two years.
The firm has taken other companies private this year, including ADT, a security services company, reports Reuters.
Shares of Apollo were also up on Friday, trading around 1.2% in the green as of 12:10 PM EST.
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