Transocean, Abiomed May See Takeover Interest, Morningstar Says

Transocean Ltd. and Abiomed Inc. are among companies that may be acquired in 2012 because they trade below fair value estimates, even as market uncertainty damps dealmaking in the first half, according to Morningstar Inc.

The Chicago-based research firm identified 20 possible acquisition candidates in its Mergers & Acquisitions Insights report published today. Transocean may benefit from management changes and could be bought for a discount, while Abiomed’s cardiac medical devices may be sought by a bigger rival, and the company may be worth nearly 40 percent more than recent share prices, Morningstar said.

Energy, health-care and communications companies offer buyers the most attractive valuations, according to the report. Consolidation among energy-services companies, a push by health-care firms to acquire devices and communications companies bidding for airwaves will drive M&A this year. Meanwhile, transactions worth more than $10 billion will probably stay on the “backburner,” according to Morningstar.

“In this type of environment, M&A is often a way to purchase growth,” Bridget Freas, a Morningstar analyst who contributed to the report, said in a telephone interview. “The market is supportive of smaller acquisitions.”

Leap Wireless International Inc., which lacks the scale to compete with larger wireless carriers, has spectrum that may be valuable to Sprint Nextel Corp. or Verizon Wireless, Morningstar said.

Morningstar expanded the current list from 13 potential targets in September after stock market declines made many companies less expensive, according to the report.

“The overall pool is definitely more attractively valued now,” Freas said.

Morningstar’s Top Takeover Candidate Investment Ideas
Abiomed Inc.
Aerovironment Inc.
American Eagle Outfitters Inc.
Amerigroup Corp.
Charles River Laboratories International Inc.
Chico’s FAS Inc.
Cloud Peak Energy Inc.
Collective Brands Inc.
Dice Holdings Inc.
Icon Plc
Leap Wireless International Inc.
Mosaic Co.
Myriad Genetics Inc.
Nasdaq OMX Group Inc.
NII Holdings Inc.
Range Resources Corp.
Riverbed Technology Inc.
SandRidge Energy Inc.
Transocean Ltd.
Ultra Petroleum Corp.
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