OmniVision Shares Zoom to Year High on Buyout Offer

Jennifer Van Grove
August 14, 2014

OmniVision Technologies captured Wall Street’s attention Thursday after announcing that Beijing investment management company Hua Capital Management proposed to buy the company for $29.00 a share.

Shares of the image-sensor maker shot up 14 percent to around $28 a share when trading resumed after being halted in the early morning. OmniVision’s stock hit a new 52-high week of $28.34 a share during the course of trading.

Traders on StockTwits initially questioned the legitimacy of the offer, and several recommend selling the stock for profits. Investment firm Wedbush Securities, meanwhile, concluded that a competing bid for OmniVision was unlikely, as noted by finance site The Fly on the Wall. The firm also said it couldn’t find any public information on Hua Capital.

OmniVision makes chips for phones, webcams, and digital still and video cameras, and is a supplier to Apple. The company said that its board of directors was reviewing the all-cash proposal, which values the company at $1.67 billion. The offer represents a nearly 18 percent markup over the company’s Wednesday close price of $24.60.

If the deal goes through, Hua Capital Management would be picking up the company on a high note, as shares of OmniVision are up 47 percent over the same period last year.

OmniVision is scheduled to report earnings at the end of the month. Analysts are estimating earnings of 52 cents per share on sales of $381.50 million. The company has beat on the bottom-line in its four prior quarters.

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