Needham & Company Downgrades Silicon Image (SIMG) to Hold Amid Takeover

Needham & Company downgraded Silicon Image (NASDAQ: SIMG) from Buy to Hold amid takeover.

Analyst Rajvindra Gill commented, "Yesterday, Lattice Semiconductor (NC) announced it will acquire Silicon Image in an all-cash tender offer of $7.30 per share, representing an equity value of ~$600MM (or ~$450MM on an enterprise value basis) and a 34.6% premium to the average closing price over the last 90 trading days. We've felt for a long time that SIMG represented an attractive M&A candidate. Both LSCC and SIMG are roughly equal in size with revenues of $367MM/56% GM and $255MMM/61% GM, respectively. LSCC expects to take out $32MM of synergies from the combined company and expects that Non-GAAP EPS for LSCC could double in a year time frame. We think $7.30/share represents a fair value and we don't think there any other likely suitors, and therefore we downgrade to Hold."

For an analyst ratings summary and ratings history on Silicon Image click here. For more ratings news on Silicon Image click here.

Shares of Silicon Image closed at $7.29 yesterday.

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