After a media report that a billion-dollar takeover could be imminent in the USA, the rumors have now been confirmed.
Hewlett Packard Enterprise is acquiring Juniper Networks for around $14 billion in cash. That corresponds to $40 per share, or a premium of 32.4 percent compared to Monday’s closing price. The Wall Street Journal had already reported the day before that the takeover negotiations were well advanced, citing informed people. The transaction is expected to add to Hewlett Packard Enterprise’s adjusted earnings per share and free cash flow in the first year following closing.
The transaction is expected to be funded by $14 billion in term loan commitments and is expected to close in late 2024 or early 2025, subject to regulatory approvals. HPE is struggling with sluggish demand in its traditional server business and aims to leverage Juniper’s offerings, including network security and AI-powered enterprise networking operations (AIOps).
The AI boom is currently causing companies to invest billions in upgrading and developing new products. Weak demand from inflation-stricken mobile phone providers and cable operators as well as tough competition from Cisco and NVIDIA in the network sector weighed on Juniper.
In NYSE trading on Wednesday, Juniper shares moved up 2.12 percent to $37.59. In official trading on Tuesday, the paper rose by over 20 percent.
HPE investors seem to have gotten used to the idea of the takeover: after a discount of almost 9 percent was recorded in official NYSE trading on Tuesday, the share price gained 1.73 percent to $16.42 on Wednesday.
Dow Jones Newswires / Reuters / editorial team finanzen.net
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