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UBS’ Take on the Avaya Rumours
By Mark Evans | May 29, 2007
In light of the Wall Street Journal reporting that Nortel may be interested in buying Avaya, UBS Securities said the possibility of a Nortel-Avaya deal “would be consistent with Nortel’s strategy of increasing focus on enterprise and professional services” but that it would involve high integration risks. In a research report, UBS analyst Nikos Theosopoulos said buying Avaya would give Nortel 30% of the enterprise voice market, as well as more scale in the services business. He also believes it would be accretive based on a price of $16.50 a share and $200-million in operating synergies. “Synergy targets may be larger than $200-million but we take a conservative view given integration risk, large product overlap and large services component at Avaya”.
Topics: Analyst Coverage |