Shares of networking equipment maker Foundry Networks (FDRY Quote) rose more than 5% Wednesday ahead of its impending $3 billion acquisition by Brocade (BRCD Quote).
The boost, which sent Foundry shares up to $17.10 in early trading, came a day after storage switch specialist Brocade secured a $1.1 billion loan and a $125 million revolving credit facility to fund its Foundry acquisition late Tuesday, which pushed the stocks of both firms up in after-hours trading.
"Foundry is trading at a significant discount to its acquisition price, which provides opportunity for investors," Pacific Growth Equities analyst Kaushik Roy said Wednesday in an research note. "Foundry stock closed yesterday at $16.26, which is significantly below what Brocade is offering: $18.50 (Cash) + 0.09 Brocade shares." ...
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