Broadcom (BRCM) Takeout Value Could be $58/Share - Piper

Commenting on rumors Broadcom (NASDAQ: BRCM) is in talks to be acquired by Avago Tech (NASDAQ: AVGO), Piper Jaffery analyst Ruben Roy said the implied takeout valuation could be $58 per share. He also thinks Intel (NASDAQ: INTC) could be interested in the company.

Roy explained, "We think a deal would make strategic sense. BRCM's network/infrastructure segment (31% of revenue) is most complementary to AVGO's existing business followed by its mobile and wireless segment (38% of revenue) which is complementary to AVGO's RF wireless segment. Looking at average take-out multiples in the semi space over the past several years, we believe the deal could value BRCM at $35.2B or ~$58 per share. INTC has come up as a potential suitor for BRCM and we believe that INTC could continue to be interested in BRCM, especially as the rumored ALTR deal remains in limbo."

Piper has a Neutral rating on Broadcom.

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