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Infinera (NASDAQ:INFN) could see a potential bidding war after Nokia (NOK) agreed to acquire the company for $6.55 a share on Thursday. Infinera shares jumped 17% on the deal news.
“Considering NOK’s offer doesn’t appear compelling, we believe there could be others who may decide to outbid NOK for INFN,” B. Riley analyst Dave Kang wrote in a note earlier on Friday.”We were (1) surprised by the timing of the transaction and (2) disappointed by the offer price.”
One possible potential bidder may be Ericsson (ERIC), which doesn’t have an optical business, Kang added. Another candidate could be Ciena (CIEN) and a “long shot” buyer could be Arista Networks (ANET).
“As such, we would be disappointed if INFN ends up being acquired by NOK for only $6.65/shr,” Kang who has a buy rating and $9 price target on Infinera wrote.
B. Riley’s Kang highlighted how Coherent (COHR) initially agreed to be sold to Lumentum (LITE), then II-VI came in, which won the bidding frenzy for Coherent. Similarly, Spirent was involved in a bidding war with Viavi (VIAV) and Keysight (KEYS) with Keysight coming out on top with the winning offer for Spirent.
The Nokia (NOK) deal comes after Reuters reported in March of last year that Infinera (INFN) was working with Centerview Partners on a sale process.