Market Overview

Wells Fargo Downgrades ArcSight On HP Acquisition (ARST, HPQ)

Share:

Wells Fargo Securities is downgrading shares of ArcSight (NASDAQ: ARST) to Market Perform after the company agreed to be acquired by Hewlett-Packard (NYSE: HPQ) for $43.50 per share.

In the research note, Wells Fargo writes, "HP announced that it has signed a definitive agreement to acquire ArcSight for $43.50 per share or $1.5B in cash. This represents a 24% premium over ArcSight's closing price as of Friday and a 54% premium above ArcSight's price on August 25, before the Wall Street Journal article regarding M&A speculation. We believe ArcSight's 6.41x NTM revenue multiple is in line with the range for high-growth companies. We are downgrading our rating on ARST shares to Market Perform from Outperform. While we believe many companies looked at ArcSight, we believe that HP was the only serious bidder at this valuation. This would indicate to us that a continued bidding war is unlikely and we expect the deal to close before the end of the calendar year."

Shares of ArcSight are down 11 cents to $43.80 in early Tuesday trade, indicating that traders are still speculating on another bidder emerging for the company.

Posted-In: Wells Fargo SecuritiesAnalyst Color Downgrades Price Target Analyst Ratings

 

Related Articles (ARST + HPQ)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
IINDoughertyAssumes34.0
PNRJefferiesInitiates Coverage On
YYUBSUpgrades
ROKUOppenheimerMaintains155.0
IPHIBank of AmericaMaintains80.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Trade Setup Performance Review

Protection Purchased on Motorola (MOT)