New York based activist investor, Starboard Value announced that it had acquired a 10.7% interest in Mellanox Technologies and has urged the company to improve its profitability and explore a sale of the company. Could this be a potential sale to larger players?
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Mellanox Technologies, which develops interconnecting and switching products for storage and servers, rallied 10.7% off the back of this news.
This follows the announcement of Marvell Technology’s merger with Cavium in a deal valued at about US$6 billion. Starboard Value also owns a 6.8% interest in Marvell Technology, which is a chipmaker. The merger with Cavium, which makes network processors is an attempt to diversify its business away from chipmaking, which is a declining business.
Given Starboard Value’s track record with Marvell Technology, some analysts believe that Mellanox Technologies would be open to a potential sale citing Marvell Technology, Nvidia, Xilinx and Intel as potential acquirers. At a current market value of about US$2.9 billion, Mellanox Technologies would be a very digestible and likely accretive acquisition for these larger players.
One or more AtlasTrend managed funds own shares in Mellanox Technologies.