Khac Phu Nguyen
1 min read
This article first appeared on GuruFocus.
Lumentum Holdings Inc (NASDAQ:LITE) shares edged lower to $642.09 at 11:10 a.m. ET in early regular-session trading on November 12 as optical and AI networking names fell with NVIDIA, while acquirer Marvell (NASDAQ:MRVL) slid 3.51%. The laser and optical component maker is being bought by Marvell in an all-stock deal.
Under the terms announced November 2, Lumentum holders receive 4.5 Marvell shares for each Lumentum share, a fixed ratio that ties the payout to Marvell’s price. Marvell owes a $3.2 billion breakup fee to Lumentum if the deal fails on regulatory grounds, and closing is not expected until the first half of 2028, with approvals needed from several regulators including China’s, 24/7 Wall St. reported. Marvell reports earnings on December 1.
At Marvell’s $162.87, the offer is worth about $732.92 per Lumentum share, a 19.7% gap over today’s price, wide for a signed deal and a sign of regulatory and timing risk. GuruFocus gives Lumentum a GF Score of 70/100, with 8/10 financial strength but a 1/10 GF Value Rank. The shares trade about 220% above the GF Value of $191.46, a “Significantly Overvalued” label, but the deal value now matters more than the standalone model. The next test is progress on regulatory filings, especially in China.
