Infineon Shares Up on Report of Buyout Interest

Shares of Infineon are up nearly 3% in Germany and 2.5% ($15.81 on vol. of ~53k) in U.S. pre-market trading following an article in the Financial Times newspaper that said at least three buyout firms have approached Infineon over the past six months. The FT reports Infineon, with a market cap of about €8bn ($10.4bn), could be the biggest private equity deal ever in Germany (and the first blue chip). The three buyout parties according to the FT's sister paper, the FT Deutschland, include CVC Capital Partners, KKR and Silver Lake Partners. A company spokesman however, told the FTD he was unaware of "any approaches or offers." Another source reportedly said Infineon management "does not want (a deal)." In a separate article, the FT notes Silver Lake tried to buy a stake in Infineon four years ago, from its then parent Siemens. The FT also mentions Infineon's enterprise value at 0.9x annual sales is half or a third of its peers, and its 86% stake in Qimonda is worth about €3.4bn on its own.

Sources: Financial Times [I, II, III]
Commentary: Barron's: Who Will Be the Next Motorola? • Infineon Chips to Be Used in Nokia's New Entry Level Phones • Infineon Posts First Profit In Two Years On Strong iPod, Vista Chip Sales
Stocks/ETFs to watch: Infineon Technologies (IFX), Qimonda (QI). Competitors: STMicroelectronics (STM), Texas Instruments (TXN), Fairchild Semiconductor Intl. (FCS), International Rectifier (IRF), Broadcom (BRCM), Micron (MU). ETFs: Semiconductor HOLDRs (SMH)

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