Today the market opens with the news that BigBand Networks (BBND), a video networking service provider is being acquired by ARRIS Group at 76% premium. As of this writing, BBND shares are trading 74% above yesterday’s close.
BBND was on the Value Stock Guide Premium Watch List as one of the net-net stocks – the company had more cash on its book that the shares were worth in the market.
BBND acquisition is expected to close late this year and ARRIS expects the deal to be neutral or accretive by middle of 2012.
BBND shares are up 74% to $2.21 from a close of $1.27 yesterday.
Generally when the valuations get so low, a competitive acquisition is one of the quickest ways the value in the stock can be unlocked. This is what happened here. In absence of M&A, the stock might need to wait for some time to see the market recognize its value.
If you received the Value Stock Guide watch list or the special report as a new email subscriber and decided to take a position in BBND, than Congratulations!