The M&A market generated a lot of excitement on Monday after Facebook agreed to acquire Instagram. Here are three companies that could be next. Each of them has been mentioned in takeover talk and each of them has something going for them that potential acquirers view as attractive.
Yahoo (YHOO) has been in and out of takeover talks a number of times over the past few years. There has been the ongoing flirtation with Microsoft (MSFT) that led to an official takeover offer in the spring of 2008. There also have been the endless rumors linking the company to Microsoft. The company has gone through multiple changes at the top since 2008 and "seems to be in play", according to a recent Seeking Alpha article that discussed 5 potential tech takeover targets. Yahoo has high quality Asian assets that make the stock attractive to multiple suitors. Furthermore, there is also the "good" problem tech companies have now as they are sitting on loads of cash waiting to be put to work. If that was not enough, the stock is cheap now. Yahoo is now trading at less than half of Microsoft's takeover offer in 2008 of $31 a share.
Riverbed Technology's (RVBD) stock has fallen significantly since it reached all-time highs of about $45 a share in early 2011. The stock is now sitting just below $26, or more than 40% off its highs. This has made the stock an attractive acquisition target. Just like for Yahoo, one reason that RVBD could be in play here is the very strong cash positions tech companies possess now that gives them ammo to make a big move such as acquiring Riverbed. The company also regularly takes part in takeover rumors that shows there is some interest in the company. An example of that could be found just last month as well as in the summer of last year
Peabody Energy (BTU) is another stock that has fallen on hard times as coal has taken a hit. For those that don't know, Peabody Energy is the world's largest private-sector coal company and a global leader in clean coal solutions. With 2011 sales of 251 million tons and $8 billion in revenues, Peabody fuels 10% of U.S. power and 2% of worldwide electricity. Coal stocks have been hit hard as prices for coal have fallen to such levels that a number of companies have been forced to cut production. If that wasn't enough, China announced its focus on fighting inflation than supporting growth. However, these are just short term worries. The long term fundamentals are still strong and coal isn't going anywhere as a source of energy for electric companies and it will continue to power the US and world economy for years to come. The company was recently mentioned as a takeover target in a Seeking Alpha article. The author noted that rumors have been circulating that BHP Billiton (BHP) and Rio Tinto (RIO) are interested in the company.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.