Juniper Stock Facing Challenges: Acquisition by HPE Under Regulatory Pressure

The planned takeover of Juniper Networks by Hewlett Packard Enterprise is entering a potentially critical phase. Citi analysts warn that Juniper's stock could fall by about 5% if the merger fails. This warning is based on a Bloomberg report stating that the U.S. Department of Justice could decide as early as this week whether to challenge the deal. The Citi analyst report predicts that the price of Juniper shares could drop to $33. This assessment is based on a historical premium that Juniper enjoys compared to competitors such as Cisco Systems, or an expected price-to-earnings ratio of 16.3, applied to projected earnings for 2026. On Tuesday, the Juniper stock closed at $35. There is speculation that the two companies could postpone the merger until January, hoping that the future Trump administration might offer a more favorable regulatory environment. In January, HPE announced its intention to acquire the network equipment provider for $14 billion in cash to strengthen its offerings in the artificial intelligence sector. HPE has offered Juniper shareholders $40 per share. The financing of the deal is to be secured through term loan agreements amounting to $14 billion, with the completion expected in late 2024 or early 2025, subject to regulatory approvals. The acquisition could double HPE's network business as companies increasingly invest in AI infrastructure to benefit from an industry-wide boom.