Cowen On Micron-Tsinghua Deal: 'Wow.'

In a report published Tuesday, Cowen & Co analyst Timothy Arcuri maintained an Outperform rating on

, with a price target of $30. According to a WSJ report, Tsinghua had made an unsolicited $23 billion bid for Micron, valuing the company at $21 per share. Analyst Timothy Arcuri believes that the deal "doesn't make sense for MU shareholders." In the report Cowen & Co noted that the US DoJ was unlikely to allow such a deal. "We also doubt that Tsinghua would be able to effectively manage MU's manufacturing assets in the US, so Tsinghua would effectively be paying for MU based only on MU's intellectual property as the operations would seem likely to suffer," the report added. Arcuri pointed out that

, which holds a 20 percent stake in Tsinghua, would benefit more if it acquired Micron Technology's portfolio outright in view of its "long- standing partnership (since '06) and understanding of the growing importance of DRAM and NAND on its new Purley server platforms." The report stated that Tsinghua's unsolicited bid went against the pattern of its previous deals, which were Chinese based, and also the general pattern of Chinese companies purchasing US firms, which had significant Chinese management prior to the deal. Micron's near-term results have been under pressure due to various transitory factors, including the ongoing mix shift from PCs to mobiles, shift to DDR4 from DDR3 and a capex ramp up.