Today, Infinera (NASDAQ:INFN) Corporation (NASDAQ:INFN) announced a delay in its merger process with Nokia (HE:NOKIA) Corporation, as it withdraws and plans to refile its Premerger Notification and Report Form with the U.S. Department of Justice (DOJ). This strategic move, effective as of today, is intended to allow the DOJ additional time to review the proposed merger under the Hart-Scott-Rodino Antitrust Improvements Act.
The initial filing by Infinera and Nokia took place on July 12, 2024, following the Merger Agreement signed on June 27, 2024. Infinera, a Delaware-incorporated company specializing in Telephone and Telegraph Apparatus manufacturing, is set to become a wholly owned subsidiary of Nokia upon completion of the merger.
Nokia plans to refile its Premerger Notification and Report Form by Wednesday, August 14, 2024. This action will initiate a new waiting period, which is expected to conclude by September 13, 2024, at 11:59 p.m., New York City time, unless the DOJ extends it by requesting additional information.
In the meantime, Infinera is preparing to send out proxy materials to its stockholders, including a Proxy Statement/Prospectus filed by Nokia with the SEC on August 1, 2024. These materials will be provided in connection with the special meeting where Infinera's stockholders will vote on the merger. The company urges its stockholders to read these documents carefully once available, as they contain important information about the proposed transaction.
This announcement comes amidst a series of regulatory steps required to finalize the merger, emphasizing the procedural nature of such large-scale corporate integrations. The forward-looking statements in Infinera's SEC filing acknowledge various risks and uncertainties, including the possibility that the merger may not be completed if conditions are not satisfied or regulatory approvals are not obtained.
The information in this article is based on Infinera's statement in a press release.
In other recent news, Infinera Corporation's second-quarter earnings report exceeded consensus estimates with sales of $342.7 million and an EPS of $(0.06), compared to the predicted $332 million and $(0.08) respectively.
B.Riley adjusted its price target for Infinera, reducing it to $6.65 from the previous $9.00, while maintaining a Buy rating. In contrast, Craig-Hallum downgraded its stance from Buy to Hold, aligning with the recent announcement of Nokia's intent to acquire Infinera at $6.65 per share.
This acquisition, valued at $2.3 billion, is expected to position Nokia to capitalize on the expanding artificial intelligence industry and increase its market share in the optical networking sector. The deal, which will be financed through a combination of cash and stock, has received strong investor confidence. Stifel also downgraded Infinera from "Buy" to "Hold" following the announcement, despite the company's optimism about its long-term growth prospects.
Infinera's quarterly revenue showed a year-over-year drop of 8.9% but marked an 11.7% increase from the previous quarter. This growth was primarily attributed to a 66% rise in sales to Internet Content Providers, totaling $125.3 million.
InvestingPro Insights
In light of Infinera Corporation's (NASDAQ:INFN) recent announcement regarding the delay in their merger process with Nokia, investors might be keen on understanding the company's current financial health and market performance. According to InvestingPro data, Infinera has a market capitalization of $1.33 billion and is trading at a high Price / Book multiple of 10.08 as of the last twelve months leading into Q2 2024. Despite not paying dividends, Infinera's revenue stands at approximately $1.495 billion, with a gross profit margin of 39.16%. However, the company has experienced a revenue decline of 9.07% during the same period.
InvestingPro Tips suggest that Infinera's stock price movements have been quite volatile, which may be an important consideration for investors given the current uncertainty surrounding the merger. Additionally, analysts predict that the company will turn profitable this year, which could signal potential for future growth. It's worth noting that Infinera does not pay a dividend, which might influence the investment strategy of income-focused shareholders.
For those interested in deeper analysis or seeking additional insights, there are more InvestingPro Tips available on the Infinera page at https://www.investing.com/pro/INFN. These tips could provide further guidance on the expected performance and valuation of Infinera, helping investors make more informed decisions during this pivotal time for the company.
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