Barclays (NYSE:BCS) Maintains "Overweight" on VeriFone (NYSE:PAY)

Barclays (NYSE:BCS) maintains its "Overweight" rating on VeriFone (NYSE:PAY), citing a friendlier acquisition offer for Hypercom.

"While this is a substantial increase from VeriFone's September 29, 2010 all-cash offer of $5.25 per share, we had anticipated that a higher (friendlier) offer could be made given the considerable accretion potential. Management expects first year accretion of 15% to VeriFone shareholders. However, assuming only 10% of cost saves and the divestiture of Hypercom's (NYSE: HYC) U.S. business, we see more than $0.30 of EPS accretion as achievable (almost 20% potential accretion on our fiscal 2011 EPS estimate - although deal timing will likely not be until mid-2011). We also believe that cost saves are likely to reach closer to 15%, which we estimate could result in almost $0.50 of potential EPS upside, or 30% potential accretion to fiscal 2011 estimates," said Barclays.

VeriFone closed Thursday at $33.51, increasing by $0.60, or 1.82 percent. Barclays has a price target of $39 on them.