Symantec’s stock slid more than 10% on Monday after reports surfaced that Broadcom and Symantec had halted talks for Broadcom to buy the cyber security software company over a difference in price.
The Financial Times reported Monday afternoon that chipmaker Broadcom had agreed earlier in the weekend to $28.25 a share for Symantec, putting the total value at about $20 billion. Later in the weekend, Broadcom dropped its offer to $28 a share based on new information, according to unnamed sources.
The hit on the market price was immediate. Symantec stock dropped to $22.07 a share early Monday after closing at $25.52 on Friday. At the Nasdaq close on Monday, its price was $22.75. Broadcom closed Monday at $288.34, up 1% from its Friday close. Neither company responded when asked by FierceElectronics to comment on the status of the deal.
According to the Financial Times, Broadcom still wants to make a deal and Symantec’s drop in share price could add leverage to make that happen. TheStreet had a different take, however, saying the deal is really off and that Broadcom CEO Hock Tan doesn’t want to overpay for new assets.
Broadcom recently was said to also be pursuing a purchase of Tibco, an enterprise software company, as an alternative to buying Symantec. Vista Equity Partners bought Tibco in 2014 for $4.3 billion. Tan apparently wants to buy a software company as a diversification move as chip sales are on the decline.
In June, Broadcom said its forecast for semiconductor sales declined by $2 billion largely due to the trade uncertainty surrounding Huawei. Last year’s purchase of another software company, CA, for $19 billion has been a positive move, with CA’s infrastructure software accounting for one-fourth of Broadcom revenues.