BigBand: Ready for Takeover?

In a sign BigBand Networks is getting its ducks in a row for a possible acquisition, the company’s board of directors has adopted the same change-of-control severance benefits for all of its senior executives.

According to the company’s 8-K filing yesterday, BigBand executive officers will get 12 months base salary and health-insurance benefits if they’re "terminated without cause" within six months after a takeover.

Well, the move may be a standard bit of administrative housekeeping. But it’s sure to fuel speculation that BigBand — one of the leading suppliers of switched digital video — is in takeover talks. (BigBand declined to comment.)

Recall that BigBand posted a major Q3 miss, reporting sales that were at least 29% lower than previous estimates. That led the company to lay off about 100 employees and shutter its CMTS product. BigBand’s CFO resigned and the company is facing threats of shareholder lawsuits. 

The upshot: The financial woes have hammered BigBand’s share price, so its market capitalization currently stands at around $330 million, compared with more than $1 billion in May. That’s obviously a more attractive price point for a potential acquirer. And BigBand has also shed its lagging CMTS business, another buyer-friendly maneuver. 
 
Any takers? SDV will be a major bandwidth-expansion tool for cable operators in the next few years. And BigBand, the early leader in the category, may be a relative steal at this point.