BigBand: Less Of a Takeout Target?

With BigBand Networks adding two new members to its board, there’s less chance the company will be acquired in the near-term, according to Jefferies & Co. analyst George Notter.

The company last week announced the appointment of Mike Pohl, former president of global strategies at C-COR (acquired by Arris) and the former president and CEO of nCube, and Harald Braun, current CEO of Harris Stratex and former senior executive at Nokia Siemens Networks, to its board. (See BigBand Adds Former C-COR, Siemens Execs To Board.)

“If BigBand were in the midst of a potential M&A transaction to sell the business, we presume the organization wouldn’t bother adding two new board members in recent weeks,” Notter said in a research note Wednesday.

Recall that BigBand adopted change-of-control severance benefits for all of its senior executives in December 2007, granting executive officers 12 months base salary and health-insurance benefits if they are “terminated without cause” within six months after a takeover.

Notter still believes that in the longer term BigBand “likely gets consolidated by another vendor in the space” and suggests that investors might have been discounting an “M&A premium” into the share.

Incidentally, Notter likes the addition of Pohl and Braun, both of whom have “experience in video processing and selling into telco accounts.”

BigBand on Tuesday announced its best quarter in a while, with $43.9 million in revenue (up 10% year over year) and a net profit of $2.3 million even including severance and stock-based compensation expenses.