Wunderlich Securities analyst Theodore O'Neill placed a "Buy" rating on MEMC Electronic Materials, Inc. (NYSE:WFR), bumping it up from a "Hold," after the annoucement Total SA (NYSE:TOT) would be acquiring a 60 percent stake in SunPower (NASDAQ:SPWRA).
O'Neill wrote in a note, "We would take proceeds from the sales of these shares and invest them in other solar companies with lower valuation."Another reason to sell into strength on the notice of the tender offer is that Total isn't buying the whole company ... yet. We believe that Total will likely take the remaining 40% of the company if the stock drifts lower, which it may. There is still quite a lot of uncertainty in the market over the direction of subsidies and there is constant pricing pressure from Chinese panel makers."
"MEMC is developing its own line of super-efficient solar panels that are certain to impact 2012 revenue in a positive way. We believe having its own panel line will make WFR a more attractive takeover contact," ONeill added.
MEMC closed Friday at $11.83, gaining $0.68, or 6.10 percent.
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