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(Reuters) - Juniper Networks Inc (JNPR.N) shares jumped 11 percent on Thursday after a news website said the network gear maker had hired JP Morgan to evaluate possible bids, but a source close to the matter said there was no substance to the report.
Juniper's shares jumped on Thursday morning as the benzinga.com report spread among investors, hitting a one-month high of $19.20 on the New York Stock Exchange before easing back to $18.00.
One bid is reported to be in the high $20's per share with data storage firm EMC EMC.N mentioned recently as a potential buyer, benzinga.com reported late on Tuesday. (r.reuters.com/kes43t)
But the source said the Sunnyvale, California-based network gear maker had not hired any investment bankers to field acquisition offers for the company and had not received any buyout bids.
A Juniper spokesperson declined to comment. EMC said the company does not comment on rumor and speculation.
Analysts expressed doubts about the report, which has a current market value of more than $9 billion.
Wells Fargo analyst Maynard Um said Juniper had limited data center presence, making it less attractive. Also, EMC recently hired a new Chief Technology Officer with a networking background, which suggested it was unlikely to make a large acquisition,
Paul Mansky, an analyst with Cantor Fitzgerald, said he strongly disagreed with the idea that EMC could be part of a sale process.
Juniper's high valuation meant it would be EMC's largest ever purchase and there were several cheaper firms that offered a customer mix better aligned to EMC's focus, he said.
EMC CEO Joe Tucci's planned retirement in the next year or two was also a factor, one analyst said.
"For the current CEO, who is going to be leaving soon, to make this big decision, I think it's really unlikely," Janney Montgomery Scott analyst Bill Choi told Reuters.
Choi said IBM (IBM.N) could be a possible buyer of Juniper but this would be a departure from their declared M&A strategy of focusing on software deals.
Since VMWare Inc (VMW.N), a subsidiary of EMC, announced plans to buy network technology start-up Nicira in July, competitive tension has surfaced between EMC and long-time partner Cisco System Inc (CSCO.O).
Cisco has held internal discussions in the past year about making its own move into the storage market by acquiring one of EMC's competitors.
EMC has also considered partnering with or buying Cisco's smaller networking rivals like Arista Networks, Brocade Communications Systems Inc (BRCD.O) and Juniper, sources Have previously told Reuters.
Additional reporting by Aurindom Mukherjee; Editing by Sreejiraj Eluvangal and Rodney Joyce