Oclaro (OCLR): Short Term Arb Opportunity From ZTE Confusion - Piper Jaffray

Piper Jaffray analyst, Troy Jensen, highlighted Oclaro (NASDAQ: OCLR) as a merger arb opportunity after American suppliers were banned from shipping products to ZTE sparking a large sell-off in the optical component space. The name most exposed is ACIA with ZTE representing 30% of sales in 2017, and the analyst believes it will likely not be able to recoup these losses.

The analyst views LITE/OCLR as an opportunity since Huawei represents a larger customer compared to ZTE, and he believes Huawei will gain customers at ZTE’s expense. The analyst stated "OCLR is in the midst of being acquired by LITE and terms of this transaction call for OCLR shareholders to get $5.60 in cash and 0.0636 shares of LITE stock. As of the close of the day, this would equate to $9.32 (LITE closed at $58.48), but OCLR closed at $7.99". This represents a 16% delta.

For an analyst ratings summary and ratings history on Oclaro click here. For more ratings news on Oclaro click here.

Shares of Oclaro closed at $7.99 yesterday.

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