Baker Hughes & InvenSense Gain On Takeout Rumors
Baker Hughes, (NYSE: BHI) a major provider of oilfield services, products, technology and systems to the oil and natural gas industry, along with InvenSense (NYSE: INVN), a developer of sensor chips for the mobile, gaming and wearable market, both spiked higher after reports suggested they are each being targeted for an acquisition.
Shares of Baker Hughes ended Friday’s trading session higher by more than eight percent at $59.12 after hitting a new 52-week high of $59.39.
The Wall Street Journal reported Thursday evening that General Electric (NYSE: GE) approached the oil services company regarding a takeover with a price tag on such a deal could be north of $20 billion.
The publication initially suggested that General Electric could acquire the company and then combine it with its other oil related businesses and assets to ultimately spin them all off so it can bother focus on its core products of jet engines and locomotives and other industrial goods.
However, the rumor didn’t last very long as a spokesperson for General Electric confirmed with the Wall Street Journal that it has no intention of acquiring Baker Hughes but is interested in a partnership.
Investors likely believed the rumor at first given General Electric’s deep pockets and the fact that Baker Hughes agreed to sell itself to rival Halliburton (NYSE: HAL) back in 2014 but the deal ultimately failed.
Shares of InvenSense gained nearly nine percent during Friday’s trading session following a Reuters report which suggested the iPhone and Samsung supplier is considering strategic alternatives, including a potential sale of itself.
The Reuters report did not suggest who would be interested in acquiring the company although InvenSense’s market cap of $680 million would make it a relatively easy takeover target, even when applying a generous premium.
The sector has been ripe with consolidation, the latest deal consisting of Qualcomm paying $39 billion to acquire NXP Semiconductor (NASDAQ: NXPI) who also counts itself as part of the iPhone supply chain.
The Reuters report did note that InvenSense’s management is currently working with bankers but there is no certainty that a sale process will ultimately result in a deal.