EXCLUSIVE: RBC Capital Markets Doug Freedman on Marvell/Lenovo rumor

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A rumor that Marvell Technology Group Ltd.
MRVL
will soon receive a $19 a share bid from Lenovo Group Ltd.
LNVGY
has the ring of plausibility, an analyst said Friday. RBC Capital Markets analyst Doug Freedman told Benzinga that if Lenovo made an offer "I guess it wouldn't surprise me." Bermuda-based Marvell changed hands recently at $15.49, up more than 1 percent. The shares hit an intraday high of $15.77 shortly after the rumor emerged. Freedman, who maintains a $21 target on Marvell, cautioned that the high number of shares held by company insiders "definitely creates a challenge" for any would-be acquirer. Chief Executive Sehat Sutardja and President Weili Dai held a combined 13.5 percent stake as of the company's most recent proxy filing in May. Greenlight Capital, Inc. held an 8.7 percent stake and Kohlberg Kravis Roberts & Co. held 6.6 percent, according to the filing. Freedman said Marvell declined to respond earlier this month to his inquiry about reports out of China that multiple parties wanted to invest in the company's mobile business. "But to me, the 'no comment' was different from what we'd heard in the past," Freedman said. "There seemed to be a willingness to work with the Chinese." Citing his $21 target, Freedman said "at $19, maybe that's a starting offer -- if it's an offer at all." Brianna Valleskey contributed to this report.
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