News Column

Rackspace could go private

July 2, 2014

Cloud service provider Rackspace Hosting Inc (NYSE: RAX) may take itself private and is in talks with a private equity firm to fund the deal, technology blog TechCrunch reported on Wednesday, citing a source. TechCrunch reported the company may make an announcement by this week. Rackspace, which leases server space and helps corporations store and access data in the cloud, had in May said it hired Morgan Stanley to evaluate strategic options, including partnerships and even a buyout. The option of going private has come amid at least three acquisition bids, including those from Hewlett-Packard Co and IBM, the tech blog said, citing a source within the company. Rackspace has faced stiff competition from newer startups as well as established players in the cloud computing business, such as Inc and Google Inc, which have slashed prices recently. Rackspace, which has a market value of $4.8 billion U.S., could not be immediately reached for a comment outside regular U.S. business hours. Its shares vaulted $2.43, or 7.2%, in early Wednesday trading to $36.18 U.S., within a 52-week range from $26.18 U.S. to $54.20 U.S.

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Source: Baystreet Tech Insider (Canada)

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