Morgan Stanley analyst Joseph Moore notes that On Semiconductor (ON) announced an unsolicited bid to acquire Allegro Microsystems (ALGM) at $35.10 per share, or an enterprise value of $6.9B. While stating that Allegro has “a high quality business that would be a nice fit” with On, particularly given fab utilization pressures, the firm adds that it struggles with accretion math as it believes interest expense would put a high burden on synergies to achieve accretion. Morgan Stanley has an Underweight rating and $44 price target on On Semiconductor shares.
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