Was The Aruba Networks/Hewlett-Packard Deal Fair? JP Morgan Answers

In a recent note, JP Morgan analyst Rod Hall comments on the deal between Hewlett Packard Company HPQ and Aruba Networks, Inc. ARUN.

Hewlett-Packard announced on Monday that it will acquire Aruba Networks for $24.67 per share, or a total of approximately $3 billion (1.7 billion pounds) in cash.

In the note, Hall stated:

"As speculated last week, HP announced a definitive agreement to acquire Aruba Networks for $3.0bn. We consider the deal to be a good move for HP as it positions it better in the WLAN market in the fight against Cisco. We also consider the purchase price as representing fair value for Aruba though it is on the lower end of what we thought Aruba would be likely to accept Fair value for Aruba. We view the multiple as a fair deal though not overly generous for Aruba investors, in line with our Dec-15 price target of $24 for the company."