Redback (RBAK) Takeover Rumors Prove True, Ericsson Pays $25/Share

As had been rumored (and rejected by analysts) Redback Networks Inc. (NASDAQ: RBAK) announced a definitive agreement to be acquired by Ericsson (NASDAQ: ERIC) for $2.1 billion or $25 dollars per Redback share. The stock closed at $21.17 today.

NOTE: Today RBC analyst Mark Sue downgraded the stock, citing 'limited upside' and claiming a takeover was 'unlikely'. OUCH - BAD CALL

RBC Capital Downgrades Redback (RBAK), Says Takeover Not Imminent

According to Barron's Tech Trader blog, RBC Capital cut its rating on Redback Networks (Nasdaq: RBAK) today from Outperform to Sector perform, citing valuation. The analyst also said they do not believe a takeover is imminent.

The analyst said Cisco (Nasdaq: CSCO) and Juniper (Nasdaq: JNPR) are unlikely suitors given product overlap, Alcatel-Lucent (NYSE: ALU) is working on an improved switch fabric and Motorola (NYSE: MOT) may have its hand full. Link to Barron's