Avago Technologies Limited (NASDAQ:AVGO) and Broadcom Corporation (NASDAQ:BRCM) announced today the preliminary results of the elections made by Broadcom shareholders as to the form of merger consideration they wish to receive in connection with the parties’ pending business combination transaction which, as previously announced, is expected to close on February 1, 2016.
Preliminary Election Results
Based on available information as of the election deadline at 5:00 p.m., Eastern Time, on January 25, 2016, the preliminary merger consideration election results were as follows:
- Holders of approximately 188,757,182 shares of Broadcom common stock, or approximately 30.7% of the outstanding shares of Broadcom common stock, made a cash election (“Cash Electing Shares”);
- Holders of approximately 238,060,460 shares of Broadcom common stock, or approximately 38.7% of the outstanding shares of Broadcom common stock, made an election to receive ordinary shares ofPavonia Limited (which will be renamed Broadcom Limited upon closing);
- Holders of approximately 52,090,437 shares of Broadcom common stock, or approximately 8.5% of the outstanding shares of Broadcom common stock, made an election to receive restricted exchangeable units of Safari Cayman L.P. (which will be renamed Broadcom Cayman L.P. upon closing); and
- Holders of approximately 136,405,605 shares of Broadcom common stock, or approximately 22.2% of the outstanding shares of Broadcom common stock, did not make a valid election and, in accordance with the merger agreement, are deemed to be Cash Electing Shares.
The foregoing results are preliminary only, and final certified results are not expected to be available until shortly before closing. Additionally, these preliminary results do not include any shares of common stock of Broadcom Corporation to be issued in connection with the final purchase date under its employee stock purchase plan prior to closing, which will all be deemed to be Cash Electing Shares.
Based on the preliminary results above, the election to receive cash is expected to be oversubscribed. Therefore, the consideration to be received by the holders who made such election is expected to be prorated pursuant to the terms set forth in the merger agreement by and among Avago, Broadcom and the other parties thereto. After the final results of the merger consideration election process are determined, the final allocation of merger consideration will be calculated in accordance with the terms of the merger agreement.
Trading in Broadcom common stock between now and closing of the transaction
As provided in the merger agreement, from and after the close of trading today, only outstanding shares of Broadcom common stock as to which no merger consideration election was made may be traded, and such shares will be deemed to be Cash Electing Shares at the time of closing.
Expected Trading of Avago, Broadcom Corporation and Broadcom Limited
The last day of trading for ordinary shares of Avago (Ticker Symbol: AVGO; ISIN code: SG9999006241; CUSIP: Y0486S 104) and shares of Class A common stock of Broadcom Corporation (Ticker Symbol: BRCM) on the NASDAQ Global Select Market is expected to be Friday, January 29, 2016.
Ordinary shares of Broadcom Limited (Ticker Symbol: AVGO; ISIN code: SG9999014823; CUSIP: Y09827 109) are expected to begin trading on the NASDAQ Global Select Market on Monday, February 1, 2016.
Investors are urged to review any trading instructions carefully in light of the merger consideration elections applicable to Broadcom shareholders and the fact that the ticker symbol “AVGO” will be used by each of Avago (through January 29, 2016) and Broadcom Limited(commencing February 1, 2016). (Original Source)
Shares of Avago Technologies closed yesterday at $124.49. AVGO has a 1-year high of $150.50 and a 1-year low of $99.16. The stock’s 50-day moving average is $137.15 and its 200-day moving average is $127.46.
On the ratings front, Avago has been the subject of a number of recent research reports. In a report issued on January 14, Brean Murray Carret analyst Mike Burton maintained a Buy rating on AVGO. Separately, on January 13, Drexel Hamilton’s Cody Acree maintained a Buy rating on the stock .
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Mike Burton and Cody Acree have a total average return of 6.0% and 9.8% respectively. Burton has a success rate of 49.1% and is ranked #457 out of 3593 analysts, while Acree has a success rate of 46.3% and is ranked #372.
The street is mostly Bullish on AVGO stock. Out of 13 analysts who cover the stock, 12 suggest a Buy rating and one recommends to Hold the stock. The 12-month average price target assigned to the stock is $171.25, which represents a potential upside of 37.6% from where the stock is currently trading.
Avago Technologies Ltd is a designer, developer and supplier of semiconductor devices with a focus on analog III-V based products and complex digital and mixed signal complementary metal oxide semiconductor, or CMOS, based devices.