Barron's Looks at Tech Sector M&A Candidates

Tech Trader Eric Savitz gives his take on some tech sector buyouts currently up to bat, and looks at potential takeout targets and who the buyers may be.

• A weak Q1 could pressure Yahoo (YHOO) CEO Jerry Yang to cut a deal with Microsoft (MSFT). Its $31/share offer is now worth about $29 due to a fall in MSFT stock. If Yahoo comes up way short in Q1, Microsoft could pull its bid, and shares could fall to just $15 based on a comparison of Google (GOOG) and Yahoo's shares before and since the bid.
• Electronic Arts (ERTS) will win its $26/share bid for Take-Two Interactive Software (TTWO). Its bid was so far above TTWO's pre-offer price that additional suitors are unlikely.
• Down 21% this year, the software sector is ripe for consolidation. Cheap quality names include Ariba (ARBA), Epicor Software (EPIC), Lawson Software (LWSN) and DealerTrak (TRAK), Cowen's Peter Goldmacher says. Citi's Brent Thrill mentions Informatica (INFA), TIBCO Software (TIBX), BladeLogic (BLOG), Check Point Software Technologies (CHKP), THQ (THQI) and Nuance Communications (NUAN).
• Potential buyers include Hewlett-Packard (HPQ), EMC (EMC), International Business Machines (IBM), Sun (JAVA), Cisco Systems (CSCO), Microsoft (MSFT) and Oracle (ORCL).
• Networking infrastructure is another sector with undervalued companies, including Juniper Networks (JNPR), Cavium (CAVM), Foundry Networks (FDRY) and Riverbed Technology (RVBD). Extreme Networks (EXTR), with a market cap of $350M, cash of $226M, and about $40M in property, is "silly cheap."

Comments

[p. smith:]

All mindless speculation. How come nobody ever thought about HPQ to acquire EDS...? if these analysts have any sense at all they should all shut their mouths.

A bunch of blithering idiots....

2008 May 13 10:11 AM