There is just too much competition in networking now to justify a
takeover at the price needed to make it happen. At $40 a share the cost would be $8 billion. Who's willing to pay that.
Larry,
LU paid 9 x sales for Livingston, or 650MM (sales are per the 14D available on EDGAR).
If some entity were to pay 8 x sales for ASND, that would be 8 x 1.2B = $9.6B. Divided by 200MM shares (per the recent ASND 10Q available on EDGAR), this translates to $48/share.
CPQ will have the currency. It seeks authorization for 2Billion new shares, about 1/2 million of which are required for a stock split. That leaves some 1.5B shares. The CPQ 14-C (available on EDGAR), states that some of these shares may be used for acquiring businesses. Anyway, if CPQ were trading at $60/share with 750MM shares, then it should trade at $30/share with 1.5B shares. If an acquisition were non-dilutive, the remaining 1.5B shares would be worth some $45Billion, more than enough to pick up ASND or some other significant networker.
Incidentally, if CPQ were not planning something significant, why would it require so many shares to be authorized? It wants 2Billion, yet it needs only about 1/2 million to allow for the 12/31 stock split.
Gary Korn
P.S. Does anyone know how many times sales ASND paid for CSCC? |
