Spirent turns back on Viavi in backing Keysight's $1.46 billion takeover bid

By Louis Goss

Spirent Communications shares surged 10% on Thursday after the British company backed a takeover offer put forward by Keysight Technologies that saw the California company outbid its rival Viavi Solutions to take over the struggling telecoms testing firm.

In a joint statement, Keysight and Spirent said they had reached an agreement that would see the California company takeover the Crawley headquartered business at a price of GBP1.16 billion ($1.46 billion).

Spirent also withdrew its previous recommendation that shareholders back Viavi's lower offer which the Arizona company submitted earlier in March.

Keysight Technologies' offer to fully-acquire Spirent for 201.5 pence per share marks a 15% premium on the 175 pence per share bid submitted by Viavi on March 5 and a 85.9% premium on Spirent's share price on March 4.

Spirent Communications' (UK:SPT) London-listed shares increased 11% on Thursday having surged by 62% in the year-to-date. Shares in Keysight Technologies (KEYS) remained flat in Thursday's pre-market session after falling 2% in 2024 so far. Viavi Solutions (VIAV) shares were up 1% on Thursday having fallen 4% in 2024.

Spirent Communications, which makes equipment used to run tests on telecoms infrastructure, has seen its share price collapse over the previous year, due to a sharp drop in its revenue driven by a global slump in telecoms infrastructure spending.

In October 2023, Spirent's share price fell by a sharp 31% to its lowest point in years after the company issued a profit warning stating that decline in revenue would have material impact on its profits.

Spirent later put its backing behind an offer put forward by Arizona headquartered company Viavi Solutions, that caused the British company's share price to surge 63%.

Now, Spirent has withdrawn its support for Viavi's offer and backed Keysight's higher offer instead.

Low valuations on the London Stock Exchange have driven a flurry of takeover offers from U.S. companies looking to pick up British companies at bargain prices.

Headquartered in Santa Rosa, California, electronic testing equipment maker Keysight Technologies was formed by being split off from Agilent Technologies in 2014, which was itself spun out of Silicon Valley technology giant Hewlett Packard in 1999.

-Louis Goss

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03-28-24 0549ET

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