KeyBanc: Broadcom Offers $61 Billion Top Price Downgrades VMware to "In Line with Industry".

$Direxion Daily Semiconductor Bull 3x Shares ETF(SOXL.US)$ $PHLX Semiconductor Index(.SOX.US)$ KeyBanc Capital Markets analyst Thomas Blakey downgraded $威睿(VMW.US)$ from a "hold" rating to a "in line with the sector" rating. The analyst noted that $Broadcom(AVGO.US)$ acquisition of VMware is likely to be the best and final deal, with the inquiry period for the deal running through July 5; investors should not expect to see the price of the deal rise. Under the deal, Broadcom will acquire VMware for $61 billion in cash and stock.

Broadcom's acquisition plan includes a 40-day "bid waiting period fee" during which VMware can solicit alternatives, a provision that could be added as the deal closes in just a few weeks. If, for some reason, VMware gets another offer, it will have to pay Broadcom a $1.5 billion termination fee. However, Blakey believes that this is unlikely to happen.

Earlier this week, it was reported that Broadcom's deal to buy VMware could face antitrust resistance, particularly from other industry players who see VMware as the "Switzerland" of the data center space.