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Nomura On Lenovo/Marvell Takeover Rumors: They 'Make Sense'

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Speaking to Benzinga, Nomura International Trust Analyst Sanjay Chaurasia said the rumors “make sense” surrounding speculation that Lenovo Group Limited (ADR) (OTCMKTS: LNVGY) will make a formal offer for Marvell Technology Group Ltd. (NASDAQ: MRVL).

Chatter has been going around that Lenovo could offer approximately $19 per share this weekend for Marvell.

Chaurasia said the rationale could be seen in how “the big mobile players are trying to vertically integrate all the key technologies” needed to develop and ship mobile devices.

Samsung was cited as an example by Chaurasia, as the company “has been trying to internally develop their baseband technologies,” and Lenovo may be thinking in the same way as Samsung.

“Marvell has a very unique LTE technology, which is very fine tuned” to China’s market, and could help Lenovo to meet domestic demand, according to Chaurasia.

With bullish sentiment on Wall Street setting price targets around the $20 level on the stock, Chaurasia noted that a $19 bid would be in-line, but the ultimate premium could not yet be known.

Marvell Technology Group Ltd. recently traded at $15.51, up 1.54 percent.

Kevin Riley and Brianna Valleskey contributed to this report.

Latest Ratings for LNVGY

DateFirmActionFromTo
Feb 2014UBSDowngradesBuyNeutral

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