IT IS being widely reported in the technology community that an unnamed party has been sounding out Iona Technologies' peers regarding a purchase of the company's open source business unit.
Last February, Iona announced that it had received an "unsolicited preliminary expression of interest" regarding an acquisition of the company.
Although Iona did not name the potential buyer, it was widely reported that Germany's Software AG, a specialist in the application integration space that Iona also operates in, had made the unsolicited bid.
Subsequently Iona appointed Lehman Brothers and Merrion Capital to advise it "regarding strategic alternatives for the business, including, but not limited to" a sale or merger.
The Irish Times understands that a number of trade and financial buyers remain interested but that the sale process is still at an early stage.
A spokeswoman for Iona said she was aware of the reports about a potential purchase.
"As far as we are concerned, they are rumour and speculation and are not something we would comment on," she said.
She said the process was ongoing and the company would only make a further announcement if there was "material news to share with shareholders and the financial markets".
A break-up of Iona, which employs 320 people primarily at offices in Dublin and Waltham, Massachusetts, would be an ignoble end for the company which was founded in Trinity College in 1991 by Chris Horn, Annraí O'Toole, Colin Newman and Seán Baker.
Following a hugely successful floatation on Nasdaq in 1997, Iona had a market capitalisation of over €1.5 billion and employed more than 1,000 staff worldwide as it benefited from the late 1990s boom in technology spending.
Today the company is worth less than €90 million.
Sources close to the company suggest it may actually be one of the potential suitors who is sounding out market interest in the Iona division rather than its advisers.
Whoever is attempting to find a buyer has a tough task on their hands. Valuing an open source business is problematic.
Unlike traditional software companies, they do not not own the intellectual property in their software, so the main resources are their staff.
Iona's open source division is headed up by James Strachan, a highly respected member of the open source community, who co- founded US software firm LogicBlaze before its acquisition by Iona last year.
