What happened
Shares of National Instruments (NASDAQ: NATI) are soaring 17.1% at 10:29 a.m. ET after the instrumentation hardware and software products company announced it was undertaking a strategic review of its business, including the possible sale of the company.
National Instruments says it has been approached by several parties interested in buying the business.
Image source: Getty Images.
So what
National Instruments' stock has been trading in a fairly narrow range over the past five months as uncertainty about the global economy has kept a check on what otherwise seemed a solid, growing business. Wall Street analysts have been somewhat bullish about the instrumentation company's prospects and had assigned a one-year price target of around $48 a share, or about 20% above where it closed yesterday before announcing the strategic review.
Noting that National Instruments has been transforming itself over the past few years into a leaner, more efficient operation, Board Chairman Michael McGrath said, "we believe initiating a strategic review to explore options to maximize value for our shareholders is the right path forward at this time."
Now what
While National Instruments begins the review process, the board adopted a shareholder rights plan that will flood the market with stock and dilute any attempt by anyone trying to acquire more than 10% of its outstanding shares. The rights plan will expire in one year.
National Instruments says it's not under any timetable to complete the review, and nothing might come out of it, either a business combination or an outright sale of the company.
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Rich Duprey has no position in any of the stocks mentioned. The Motley Fool recommends National Instruments. The Motley Fool has a disclosure policy.
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