Marvell Falls 9.7% as Traders Balk at Potential $83B Lumentum Takeover
MRVL has more than doubled off its 52-week low of $70.685.
Summary
Marvell shares dropped 9.7% in premarket trading Thursday on reports it is in advanced talks to buy optical-networking peer Lumentum, which rose 6.0%. The fear is dilution: Lumentum's $82.79 billion valuation as of Wednesday's close is a hefty chunk of Marvell's own $220.67 billion market cap, and paying in stock would hand Lumentum holders a large slice of the combined company. Mizuho's Vijay Rakesh notes large semiconductor deals over the past 15 years carried an average 38% premium to the undisturbed price, implying more than $1,260 a share versus Lumentum's $913.95 close — so the final price tag could run well above the current valuation. This would be by far Marvell's biggest deal in a recent spree that already includes Celestial AI at $3.25 billion and XConn at $540 million. An announcement could come as early as next week, per Bloomberg's sourcing; no comment yet from either company.
At the time of this announcement, MRVL was trading at $226.14 on NASDAQ in the Technology sector, with a market capitalization of approximately $220.7B. The 52-week trading range was $70.69 to $329.88. This news item was assessed with negative market sentiment and an importance score of 7 out of 10. Source: Dow Jones Newswires.