Radware (RDWR) Tight-Lipped About a Possible Sale
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After surging 38 percent yesterday on reports out of Israel that the company is in talks to be acquired by HP (NYSE: HPQ) or IBM (NYSE: IBM), Radware Ltd. (Nasdaq: RDWR) is down 10 percent today as some feel the speculation may have been overplayed.
Yesterday a $45 per share price was being discussed in the market, sending shares of Radware as high as $40 before backing down today. The stock was at $28 prior to the takeover report.
According to Wall Street sources, the company is being very tight-lipped which they say is "clearly a change in behavior". This could be related to a sale or an OEM deal, the source said. According to the source, an OEM deal with HP (NYSE: HPQ) was in the works before takeover rumors hit yesterday.
An OEM deal, while positive, would be a big disappointment to the market, which is now betting on a takeover. If the announcement from Radware is an OEM deal, instead of a buyout, shares of Radware to fall back below $30.
As far as a sale goes, a price of $45/shares is not unreasonable. A deal at this price would 4.5x Radware's sales, whereas competitor F5 Networks, Inc. (Nasdaq: FFIV) already trades at 6.5x. 3Par (NYSE: PAR) went even north of that in its deal with HP.
While HP is a logical suitor, the push-back the company has been getting in the market from its two recent, CEO-less acquisitions (3Par, ArcSight) could keep them on the sidelines.
Other logical suitors for Radware are Juniper (Nasdaq: JNPR) and Dell (Nasdaq: DELL), according to the source. Juniper already has a partnership with Radware and was once involved in the market in 2006, before quickly exciting in 2007 on concerns of slow growth.
Yesterday a $45 per share price was being discussed in the market, sending shares of Radware as high as $40 before backing down today. The stock was at $28 prior to the takeover report.
According to Wall Street sources, the company is being very tight-lipped which they say is "clearly a change in behavior". This could be related to a sale or an OEM deal, the source said. According to the source, an OEM deal with HP (NYSE: HPQ) was in the works before takeover rumors hit yesterday.
An OEM deal, while positive, would be a big disappointment to the market, which is now betting on a takeover. If the announcement from Radware is an OEM deal, instead of a buyout, shares of Radware to fall back below $30.
As far as a sale goes, a price of $45/shares is not unreasonable. A deal at this price would 4.5x Radware's sales, whereas competitor F5 Networks, Inc. (Nasdaq: FFIV) already trades at 6.5x. 3Par (NYSE: PAR) went even north of that in its deal with HP.
While HP is a logical suitor, the push-back the company has been getting in the market from its two recent, CEO-less acquisitions (3Par, ArcSight) could keep them on the sidelines.
Other logical suitors for Radware are Juniper (Nasdaq: JNPR) and Dell (Nasdaq: DELL), according to the source. Juniper already has a partnership with Radware and was once involved in the market in 2006, before quickly exciting in 2007 on concerns of slow growth.
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