What the Broadcom Symantec Deal Collapse Means For Broadcom Going Forward

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Good talk. It didn't happen. And Broadcom AVGO investors actually seem happy about it.

Here's the news.. 

The Deal Is Off

Broadcom was initially going to buy Symantec, but it was reported Monday that the talks are over. Symantec (SYMC) - Get Report was asking for $28 a share, which represents a roughly 26% premium over the price before news broke that the deal may happen. Broadcom then walked away from the negotiating table. 

The stock rose 1.38% to $289.31 a share Monday. 

Good Sign For Broadcom?

Related.Broadcom's List of Potential Software Targets Probably Doesn't End with Symantec

"If the deal really fell apart over price it does demonstrate Broadcom's discipline in that regard," wrote Alliance Bernstein analyst Stacy Rasgon in a note. "We suspect the collapse of this particular deal is likely to be taken as a modest positive for AVGO."

He mentioned many software companies are "expensive," and that CEO Hock Tan is not a fan of paying exorbitant amounts for assets. "Expensive," in this context, doesn't mean a large dollar amount compared to Broadcom's financial position, but rather a high multiple of expected earnings. 

Other Broadcom Targets?

Tibco, a small private enterprise software company, is widely seen as a company Broadcom may target next. It manages information, decisions, processes and applications for more than 10,000 business customers. Its latest valuation was was in 2014, when Vista Equity Partners, a private equity fund, bought it for $4.3 billion.