Symantec reportedly walks away from acquisition talks with Broadcom, after disagreement about price
The attempt by Broadcom to double down on its software foray has suffered a blow, after reports said that its “advanced talks” to acquire veteran security specialist Symantec have collapsed.
The two firms were reportedly unable to reach agreement on the acquisition price of Symantec, prompting Symantec’s share price to decline to earlier this week.
It comes after multiple media reports earlier this month said that Broadcom was in “advanced talks” to acquire the security veteran. Indeed, a deal was expected to be announced this week.
But earlier this week CNBC reported that Symantec and Broadcom have ceased deal negotiations.
It cited people familiar with the matter as saying that Symantec would not accept less than $28 a share.
Broadcom had apparently been willing in early conversations that it would be willing to pay $28.25 per share for Symantec. However when it conducted due diligence it lowered the figure it was prepared to pay below $28, thought to be around $26.75.
That figure was too low for Symantec, which then withdrew from the talks.
On news the acquisition talks were off, Symantec shares dropped 12.8 percent to $22.30 on Monday. The share price is now at $22.68.
The acquisition would have been the second major software purchase for Broadcom, after it surprised many analysts and the markets in July 2018 when it acquired veteran enterprise software specialist CA Technologies for $18.9 billion (£16.7bn) to build “one of the world’s leading infrastructure technology companies”.
Broadcom has become acquisitive of late as it seeks to expand beyond its traditional chip business.
But in March 2018, President Donald Trump blocked Broadcom’s attempted hostile takeover of Qualcomm, ending what would have been the largest takeover on record in the high-tech industry, valued at an estimated $140 billion (£100bn).
Symantec meanwhile has had a troubled past in recent years.
It was one of the pioneers of consumer antivirus software, and is perhaps best known for its Norton antivirus and BackupExec software. But it has also sought to become a serious player in the data storage arena, acquiring Veritas Software for a hefty $10.2bn (£6.3bn) in 2005.
Yet it has struggled for some time now to expand into new areas of the security market, and it has been criticised for not keeping up with key trends such as the the shift towards cloud computing and the slump in PC sales, as well as the arrival of more agile security competitors.
In 2014 Symantec was reportedly in advanced talks about a possible company breakup, to split up its business into two entities, with one unit focused on its security programs, and another on data storage.
Symantec also has something of a revolving door reputation for CEO departures.
In 2009, for example, Symantec appointed Enrique Salem as CEO, but he was deposed just three years later (in 2012).
Board member Steve Bennett was then appointed as CEO, but after just 20 months in the job, he was fired in March 2014 amid falling earnings.
Another CEO, Michael Brown, resigned in April 2016, and then in April 2019 CEO Greg Clark also unexpectedly stepped down and was replaced by director Richard Hill on an interim basis.
There is still no permanent CEO appointed, and the security vendor is also contending with an activist investor (Starboard Value LP) which won three board seats on the company last September.
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