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Micron shares jump on increased takeover possibility

Micron Technology Double-Data-Rate Synchronous Random-Access Memory (SDRAM) chip
Tomohiro Ohsumi | Bloomberg | Getty Images
Micron Technology Double-Data-Rate Synchronous Random-Access Memory (SDRAM) chip

Shares of Micron jumped 6 percent on Monday after the company filed a new shareholder rights plan.

The agreement aims to prevent an "ownership change" and preserve certain tax benefits, according to documents filed to the Securities and Exchange Commission after the close on Friday.

Credit Suisse said the plan increases the "possibility of strategic investment or acquisition" in the near term and that "potential investors or acquirers" include China or Intel. The firm said in an analyst note that a "strategic investment is likely to value MU at $17-22 per share, and would be positive for the stock."

Earlier this month, Micron shares took a beating after the company announced a restructuring that included job cuts.

In its most recent quarterly results, Micron reported a third-quarter loss of 8 cents on revenue of $2.90 billion. In the comparable year-ago period, the company had posted earnings of 54 cents on $3.85 billion in revenue.

The stock has struggled, falling 24 percent in the past year.

Disclosure: Credit Suisse has provided investment banking services to and managed or co-managed a public offering of securities for Micron within the past 12 months. The firm also makes a market in Micron.