(Bloomberg) — Avast Plc’s shares jumped the most in more than a year after the cybersecurity software company said it’s in “advanced talks” to merge with NortonLifeLock Inc.
The shares rose 15% to 577.60 pence at 8:19 a.m. in London after earlier jumping as much as 17%, the biggest intraday increase since March 2020. The move erased previous losses, putting the shares up 7.2% this year and giving the company a market value of 5.9 billion pounds ($8.2 billion).
“There can be no certainty as to whether any transaction will take place or the terms on which any possible merger may be agreed,” Avast said in a statement late Wednesday. NortonLifeLock separately confirmed the talks and said no agreement has been reached.
A deal could value the Prague-based firm at more than $8 billion, according to an earlier report in the Wall Street Journal. NortonLifeLock is likely to offer a mix of cash and shares if it goes ahead with a takeover, the companies said. Now that the talks have become public, NortonLifeLock has until Aug. 11 to announce its intention to make an offer, according to the statements.
Tempe, Arizona-based NortonLifeLock has a market value of about $15.6 billion. The firm was known as Symantec Corp. before it sold its enterprise-security business to Broadcom Inc. in 2019 for $10.7 billion. It had attracted takeover interest a few years ago but no deal transpired. Avast primarily makes free and premium security software and offers desktop and mobile-device protection.
“A combination of NortonLifeLock and Avast would bring together two companies with aligned visions, highly complementary business profiles and a joint commitment to innovation that helps protect and empower people to live their digital lives safely,” NortonLifeLock said in its statement.
Avast notes on its website that it declined an offer to be acquired by competitor McAfee in 1997 and opted to license its antivirus product to the company instead. Avast, formerly known as Alwil, took its current name in 2010 and went public in London in 2018. Private-equity firm CVC Capital Partners took a “major stake” from the company’s founders in 2014 and investor Summit Partners.
Avast’s founders, who also sit on its board, control about 35% of the shares.
Activist investor Starboard Value LP has a stake in NortonLifeLock and holds a board seat. It first took the position in 2018.
(Updated with shares)
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