A 22% plunge in Marvell shares since takeover talks emerged on Oct 28 has wiped out the 23.9% premium in its $115 billion all-stock acquisition of data center optics maker Lumentum, cutting the implied offer to about $884 per share, or 3.3% below Lumentum’s undisturbed price of $914. Marvell fell more than 7% on Monday to cap its worst three day selloff in 25 years, shrinking the deal’s equity value from $102.5 billion to roughly $80 billion and sending Lumentum shares down 11%.
Under the agreement announced Monday, Lumentum stockholders receive a fixed exchange ratio of 4.5 Marvell shares for each share held, with no cash component or price collar to protect the $1,132 per share valuation measured at Oct 28 closing prices. The transaction gives Lumentum shareholders 33% of the combined company and is scheduled to close in the first half of 2028. It includes a $5.8 billion reverse breakup fee if Marvell’s board walks away and a $3.2 billion fee if regulators block the merger.
The selloff overshadowed Lumentum’s September quarter results released the same morning, in which revenue rose 137% year over year to $1.26 billion with a 42.3% non-GAAP operating margin. Lumentum also guided next quarter revenue to $1.575 billion to $1.625 billion and booked a second major optical packaging win backed by more than $5 billion in purchase commitments.
