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ARM Holdings Up 44% On Softbank Acquisition; Analyst Sees 'Limited Possibility Of A Counter-Bid'

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ARM Holdings Up 44% On Softbank Acquisition; Analyst Sees 'Limited Possibility Of A Counter-Bid'

Shares of Apple Inc. (NASDAQ: AAPL) ARM Holdings plc (ADR) (NASDAQ: ARMH) surged by 44 percent early Monday morning after the company announced its Board of Directors reached an agreement to be acquired by Japan-based SoftBank for 1,700 pence per London-listed ARM share.

SoftBank's offer also represents a value of $67.27 for each ADR-traded share and the issue has run up to $67.66 per share during the pre-market trading session.

'Limited Possibility Of A Counter-Bid'

Achal Sultania of Credit Suisse commented in a note that he sees "limited possibility of a counter-bid" and the deal with SoftBank is unlikely to be subject to any anti-trust or regulatory concern.

Related Link: Apple's Near-Term iPhone SE Strength Offsets 6s/6s Plus Weakness

Sultania noted the merger will yield the following:

1) SoftBank will run ARM as a separate entity within SoftBank and keep its headquarters in the UK

2) ARM will retain its brand, senior management and partnership business model

3) Double the employee headcount in the UK

4) SoftBank will accelerate the adoption of ARM's IP across existing and new markets

5) Increase SoftBank's investments to drive growth and innovation

6) Maintain SoftBank's dedication towards innovation.

Finally, Sultania highlighted one phrase from ARM's statement that highlights the attractiveness of the deal: "This is a compelling offer for ARM shareholders, which secures the delivery of future value today and in cash."

Latest Ratings for ARMH

DateFirmActionFromTo
Jul 2016DowngradesBuyHold
Jul 2016UpgradesUnderperformMarket Perform
Jul 2016DowngradesOutperformMarket Perform

View More Analyst Ratings for ARMH
View the Latest Analyst Ratings

Posted-In: Achal Sultania ARM Holdings Credit SuisseAnalyst Color M&A News Analyst Ratings Tech Best of Benzinga

 

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