Wedbush: Plans to Sell Informatica Nonexistent

Informatica Corporation INFA has been tearing higher – propelled by rumors that Elliott Associates, an activist hedge fund, is pushing for a sale. Shares were trading at $38 mid-day Monday; prices closed at $43 yesterday.  

Today, analysts at Wedbush said that plans to sell the company is “nonexistent.” Wedbush reiterated a Neutral rating and raised its price target to $42 from $37. 

Wedbush clearly thinks Elliott will not be. Wedbush says management’s plans to invest in growth are counter to the path a company would take to cut costs ahead of a private-equity sale. Further, Informatica's management has a good reputation, allowing them room to make improvements without activist pressure. As the speculation cools, Wedbush sees the take-out premium falling.

However, the analysts note that in the near term, shares “won’t be driven by fundamentals,” but instead by speculation on whether Elliott will be successful.