Workday shares experienced their most significant single-day surge in a decade, jumping nearly 18%, following a report that private equity giant Silver Lake is in discussions to acquire the human resources software provider.
Trading of Workday stock was temporarily halted multiple times in late afternoon sessions. The company's market capitalization closed at approximately $51 billion after Reuters broke the news.
Sources familiar with the matter told Reuters that these acquisition discussions have been ongoing for several months. Both Workday and Silver Lake did not immediately respond to requests for comment regarding the report.
The potential acquisition comes at a time when Workday's stock has faced considerable pressure due to widespread concerns that artificial intelligence (AI) advancements could disrupt its core business model. A major takeover in the software sector amidst these fears could signal a renewed investor appetite for the industry.
Despite rebounding from a recent selloff sparked by AI concerns, Workday shares are still down 7% year-over-year.
In March, co-founder Aneel Bhusri reassumed the role of CEO, succeeding Carl Eschenbach. Bhusri has a long history with the company, having served in various leadership capacities, including prior stints as CEO and co-CEO.
Jefferies analyst Brent Thill commented on the potential deal on CNBC's "Power Lunch," stating, "Aneel Bhusri, the CEO, and Egon [Durban] from Silver Lake know each other well through many connections. So we think certainly this could make sense, and I think this goes back to how badly hit software's been."
Adding to recent positive momentum, Workday reported better-than-expected earnings in May and subsequently raised its forecast, citing tailwinds from AI adoption.
Workday shares pop on acquisition news
