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Synaptics (SYNA) Stock Surges 7% on Fresh Buyout Rumors

Zacks Equity Research
Updated

Per a Bloomberg report, chip maker Synaptics Inc SYNA and a Chinese backed investment group are still holding discussions to chalk out a buyout deal. Synaptics moved up 7.3% yesterday to a high of $90.91 before closing lower at $87.21 per share.

Citing sources familiar with the matter Bloomberg said that the two parties are working out the final offer price, which could be somewhere above or below $110. This represents an over 26% premium over yesterday’s closing price. Chinese companies have long been interested in buying U.S technology companies to enhance their own technology. However, U.S regulators have become more vigilant regarding takeovers that involve Chinese firms.

The announcement might come along with Synaptics fiscal third quarter 2016 earnings report on Apr 28. The Chinese consortium of buyers includes semiconductor fund backed Beijing BOE Technology as well as financial and insurance companies.

The buyouts rumors have been around for quite some time now. Earlier, on Jan 20, Bloomberg reported that a Chinese consortium of buyers was interested in acquiring Synaptics, causing a 27% surge in share price on the day.

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Synaptics is primarily engaged in developing human interface solutions for a wide array of mobile computing and communications devices and is one of the leading suppliers of TouchPads to the notebook computer market. The company boasts Apple Inc AAPL as one of its biggest clients along with Asian giants like Samsung, Huawei and Lenovo.

At present, Synaptics carries a Zacks Rank #3(Hold). Better-ranked stocks in the same space include GigPeak, Inc. GIG and Silicon Motion Technology Corp SIMO. Both sport a Zacks Rank #1 (Strong Buy).

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