Numis names "multiple" potential bidders for CSR
CSR's share price edged higher on Monday as the stock extended gains made last week after the wireless technology firm received an approach from US outfit Microchip.
While the approach was rejected by the board of the FTSE 250 firm, analyst Nick James from Numis Securities sees further upside to CSR's shares and lifted his target from 840p to 915p.
He said that a process to evaluate other potential bidders is now likely under way and that "multiple" cash-rich semiconductor companies could be interested.
The company makes components for devices that fall under the so-called 'internet of things' (IoT) umbrella, focusing on the voice and music, bluetooth, in-car infotainment, navigation and document imaging markets.
James said: "We note Intel, Broadcom, Texas Instruments, Samsung and entities of the Chinese government as potential bidders for the business, who would be attracted to its high gross margins, strong market positions in growing audio and automotive markets with promising potential in IoT, particularly in smart home."
He said that an offer price in the 1,040p-1,090p range could be achievable. However, his 915p target price reflects a "30% chance of a non-competitive bid at 860p and a 30% chance of a competitive bid at 1,065p, with 40% probability going it alone."
After the recent surge in the shares, which closed at 575p last Wednesday - the day before the Microchip offer - Numis' rating for the stock has been downgraded from 'buy' to 'add'.
CSR was trading 1.2% higher at 795.5p by 11:29.
BC