Investing.com – Symantec (NASDAQ:SYMC) plunged on Monday after merger talks with Broadcom (NASDAQ:AVGO) reportedly fell through as the two parties failed to reach an agreement on price.
Broadcom (NASDAQ:AVGO) reduced its $28.25-a-share offer for Symantec to below $28 a share following a closer examination of the cybersecurity company, CNBC reported. But with Symantec unwilling to accept any offer below $28, talks fell through.
Shares of the Symantec (NASDAQ:SYMC) sank 13%.
Symantec is the developer of cybersecurity applications for computers, networks and the cloud. It is best known for its Norton family of products. Even with Monday's decline, Symantec shares are up more than 15% this year.
Broadcom (NASDAQ:AVGO), meanwhile, was up more than 1% on the day and is up 13.7% on the year.
Analysts at Wedbush had expected the two to reach a deal in the range in the range of $26 to $28. Others on Wall Street, however, believed the offer was too high, with Jefferies saying in a research note last week that it valued Symantec (NASDAQ:SYMC) at $24 per share.
The news caught the analyst community by surprise, as many had believed, given Symantec’s woes, that a deal was in the best interest of the company.
“With Symantec in the midst of coming off a sudden CEO departure, soft results/guidance, and a myriad of company specific/secular headwinds now is the right time to finally consider a sale of the business after what has been an arduous 14 years of ‘one step forward, two steps back’ history since the doomed Veritas acquisition in 2005,” Wedbush said in a note last week.
Adding to expectations of an imminent deal, both companies announced last week that talks were at an “advanced stage,” with Bloomberg, citing sources, reporting a deal was expected to be announced as early as Tuesday.
Broadcom was expected to realize up to $1.5 billion in cost savings by merging Symantec with CA, which it acquired in July last year, Wedbush added. The increased focus on acquisition for Broadcom comes as the chipmaker is seeking to grow its software business.