VeriFone Holdings: Susceptible to Hostile Takeover

SunTrust analyst Andrew Jeffrey is out with a major call on VeriFone (PAY) saying the protracted internal accounting challenges, and the shares resulting swoon, leave the company susceptible to a hostile takeover bid.

The Firm sees First Data Corp. as the most likely suitor and the most logical strategic partner for VeriFone. Further, a recent conversation with a leading value-added reseller leaves them confident that VeriFone's market share has not suffered from its internal accounting challenges. The Firm believes a business combination would significantly extend FDC's distribution reach and technology capabilities while sharply lowering its manufacturing costs. Reiterates Buy and $22 target on PAY.

Notablecalls: Looking for a $0.50-1.00 move in PAY (as distributed on Notablecalls Network).

Comments

[condobythes...:]

Not a bad call - it would be a steal for a suitor. PAY is the dominant force in the industry. The transition to plastic payment supports long term growth.

2008 May 23 07:43 PM