Terayon share price skyrockets on acquisition rumors

Light Reading cites industry sources as saying, The winner could pay as much as $250 million for Terayon, at up to $3 per share.

Terayon Communication Systems Inc. (Pink Sheets: TERN.PK) rose 16% on Friday on rumors of a pending takeover. Light Reading reported, Motorola Inc. (NYSE: MOT) is generally considered the favorite to win the prize in a three-way race with Cisco Systems Inc. (Nasdaq: CSCO) and Harmonic Inc. (Nasdaq: HLIT).

Light Reading said that Terayon declined to comment on reports of a pending takeover.

Terayon, a developer of broadband access solutions for homes and digital video applications, was founded by chairman Zaki Rakib and his brother, Shlomo, a company director, in 1993. Both men still own shares in the company.

Light Reading cites industry sources as saying, The winner could pay as much as $250 million for Terayon, based on a valuation of up to $3 per outstanding share. That price could conceivably go even higher if a new bidding war erupts and the suitors decide to up the ante.

Terayon is currently traded at $2.10 per share, which means a takeover is being suggested at a premium of 44% of the companys market price.

Light Reading adds, A fourth would-be suitor, Arris Group Inc. (Nasdaq: ARRS), has dropped out of the Terayon bidding contest after snatching a much larger catch, Tandberg Television ASA (OFX:TAT), from the clutches of such rivals as Motorola for $1.2 billion.

Tandberg is a rival of Israeli companies Optibase Ltd. (Nasdaq: OBAS) and Scopus Video Networks Ltd. (Nasdaq:SCOP).

Published by Globes [online], Israel business news - www.globes.co.il - on February 18, 2007

Copyright of Globes Publisher Itonut (1983) Ltd. 2007

 
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