Broadcom (BRCM) Stock Lower Following Merger Deal With Avago Technologies

NEW YORK (TheStreet) -- Shares of Broadcom Corp  (BRCM) were lower by 3.04% to $55.42 on heavy volume in early market trading Thursday, after the company agreed to be acquired by Avago Technologies  (AVGO) in a cash-and-stock deal valued at $37 billion.

Avago is offering Broadcom shareholders $17 billion in cash and shares of Avago valued at $20 billion.

The takeover offer values Broadcom at $54.50 per share.

Yesterday, shares of Broadcom closed at $57.16 per share.

Prior to the official deal announcement, analysts at CLSA downgraded Broadcom this morning to "outperform" from "buy" due to valuation.

The firm added that it would not rule out a competitive bid for the company.

About 20.05 million shares of Broadcom have changed hands as of 9:59 a.m. ET today, compared to its average trading volume of about 8.64 million shares a day.

Irvine, Calif.-based Broadcom is a global semiconductor solution for wired and wireless communications.

The company provides system-on-a-chip, and software solutions, operating under segment including broadband communications, mobile and wireless, and infrastructure and networking. 

Separately, TheStreet Ratings team rates BROADCOM CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate BROADCOM CORP (BRCM) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel its strengths outweigh the fact that the company shows weak operating cash flow."

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