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Networking company Brocade made a hefty $1.5 billion bid Monday for Ruckus Wireless, a company that helps build carrier-grade Wi-Fi networks at stadiums and other big locations.
The bid is a 40 percent premium over where the stock closed Friday, but some analysts believe that the bid could prompt wireless equipment vendors, such as Nokia or Ericsson.
“We would not rule out the emergence of other bids given the standard $50 million break-up fee and the interest it might attract from Ericsson, Nokia, CommScope, Juniper, among others,” BTIG analyst Walt Piecyk wrote in a research note. “It does not appear that Ruckus had dialogue with any of these companies during the process. … In addition, the reaction of Brocade’s stock and their decision to offer a high mix of stock in this transaction despite clearly having enough cash for the deal, opens up the door for a competitive bidder.”
Though not household names, those that bring Wi-Fi into businesses or help carriers add Wi-Fi to their networks have been big acquisition targets for other networking vendors. Hewlett-Packard Enterprise bought Aruba Networks last year and before that Cisco acquired Meraki.
The move comes as cellular service providers increasingly look to support Wi-Fi networks to help manage demand for data, while some companies that haven’t been in the wireless game, such as Cablevision, Comcast and Google, look to deliver wireless service relying either primarily or exclusively on Wi-Fi.
It will be interesting to see if Nokia or Ericsson jump in or let this one go. Nokia, of course, is fresh off its large purchase of Alcatel-Lucent, so might need a little time for digestion before taking on another acquisition.
This article originally appeared on Recode.net.
