The stock market is bucking the trend of 2010 as we’re currently trending lower on a Monday. The market, however, is still well above the lows from Friday morning. Most of the rally from Friday afternoon still holds. The cyclical stocks are leading the market lower today.
Genzyme (GENZ) has rejected the $18.5 billion offer from Sanofi-Aventis (NYSE:SNY), believing the bid is too low. I don’t have a strong opinion about either company but I’m happy to see companies reject buy-out offers right now. As usual, the market had the right idea. GENZ’s had already been trading above SNY’s bid price of $69 a share. Sanofi’s CEO said they made a "compelling" offer and that Genzyme’s management "has a history of overpromising and under-delivering.” Ooooh, snap!
On the Buy List, Intel (NASDAQ:INTC) is still in a buying mood. This time, they’re picking up the wireless unit of Germany’s Infineon Technologies (OTCQX:IFNNY) for $1.4 billion. This is an area where Intel has not been particularly strong.
"The acquisition of Infineon's wireless business strengthens the second pillar of our computing strategy--Internet connectivity--and enables us to offer a portfolio of products that covers the full range of wireless options from WiFi and 3G to WiMAX and the long-term evolution," a standard for the new faster fourth generation mobile networks," Intel President and Chief Executive Paul Otellini said in a statement.
Infineon will "now fully concentrate our resources towards strong growth in our core segments," its CEO Peter Bauer said without elaborating. He added that the sale of its wireless operations "is a strategic decision to enhance Infineon's value."
Bauer added that acquisitions are an element of Infineon's further growth strategy, although he added that there are no concrete talks and he fells no time pressure to buy.
Infineon got a "reasonable price" for its wireless unit "but might be below ambitious market expectations that failed to factor in upcoming investment" for fourth generation networks, said Commerzbank analyst Thomas Becker, who rates the shares buy, but cut his target price to EUR5.80 from EUR6.60 to reflect the divestment.
The stock is currently hovering around $18 a share.