LONDON - The FTSE 100 slid from 13-year peaks on Thursday, battered by weak Chinese economic data and signs the U.S. Federal Reserve could soon taper its stimulus programme.
FRANKFURT - New solar installations reached a fresh record of 7.5 gigawatts (GW) in Germany in 2011, playing into the hands of advocates for steeper cuts in tariff subsidies to reduce growth of solar power and the resulting higher costs for consumers.
Exclusive: Tech giants eye F-5 Networks acquisition
NEW YORK |
NEW YORK (Reuters) - Shares of F5 Networks Inc (FFIV.O) closed 2.5 percent higher on Monday after Reuters reported that the company had received a takeover overture last year and remains a potential target for technology giants.
According to people familiar with the discussions, possible buyers eyeing F5 Networks include International Business Machines Corp (IBM.N), Dell Inc (DELL.O), Hewlett-Packard Co (HPQ.N), Oracle Corp (ORCL.O), Juniper Networks Inc (JNPR.N) and Cisco Systems Inc (CSCO.O).
"F5 is such a strategic asset and as a big land grab (takes place) within communications right now in the data center," said Tony Carbone, a senior analyst at RCM Capital Management.
The Seattle, Washington-based networking company, which focuses on boosting the delivery of applications in data centers, was approached about the prospect of a takeover over a year ago, said one source. The identity of the potential buyer was not revealed.
Oracle has made recent public comments that it will become more aggressive moving into the data center, while HP, through its recent deal announcement with 3PAR, and IBM's deal with Blade Network Technologies, is further testament to the tech behemoths' interest in the sector, Carbone said.
Although a few potential buyers have expressed interest, F5 has decided not to run an auction, said a person familiar with the matter. "They have done pretty well on their own...there are a lot of reasons for them to stay independent," added another person.
The discussions between the first potential buyer and F5 were described as "on and off for a while," but were eventually called off over valuation issues, said the source knowledgeable about the approach of over a year ago.
A spokesman for F5 declined to comment.
The company's stock has rapidly appreciated from about $40 a share a year ago to $105.89 at the close on Monday. It reported $780 million worth of cash and investments as of June 30 and currently has a market cap of $ 8.31 billion.
Some analysts are skeptical a merger can be done at these prices.
Over the last year, two of the largest deals in the space have included Oracle's acquisition of Sun Microsystems for $7.4 billion and Intel's $7.68 billion acquisition of McAfee this summer, said Nikos Theodosopoulos, a senior analyst at UBS.
Although a strategic asset, the recent move in the stock and the current market cap has put F5 out of the sweet spot for an acquisition this year, according to Theodosopoulos.
The valuation of F5 might be rich, but Alex Henderson, a networking technology analyst at Miller Tabak + Co, says its 2011 estimates have plenty of room for upside.
Currently F5 is trading at around 33-times 2011 estimates, but that is a discount to peers, Riverbed Technology (RVBD.O) at 37 times and Acme Packet APKT.O at 41.
And HP's recent $2.35 billion acquisition of 3PAR was done in excess of 120-times 2011 estimates for an 18-20 percent growth company.
F5 is considered one of the best assets in the networking business, said one of the sources. "Everybody would want to acquire them if they could get them for a price that makes sense," this person said.
A banker that advises a large private equity firm said F5 remains on the radar of big tech companies looking for strategic network assets.
In recent weeks, a number of sell-side analysts have increased their price targets for F5 to range from $105 to $123 per share.
"Is F5 too big to buy? I would say no way. If they can alter the equation sufficiently, it can change the dynamic in the data center architecture division," Henderson told Reuters. (Reporting by Nadia Damouni; Editing by Tim Dobbyn)
- Tweet this
- Share this
- Digg this