New York: Apple has agreed to buy fingerprint reader AuthenTec Inc for approximately $356 million as the maker of iPhones and iPads looks to strengthen its digital security capabilities.
Apple’s acquisition comes as consumers use their smartphones for more and more daily activities, including shopping.
“As cellphones become essentially credit cards, consumers will look to secure them in the event of theft or loss. AuthenTec’s fingerprint sensors offer one way to secure handsets,” said Raymond James analyst J Steven Smigie.
It’s not known what Apple’s plans are. Rival devices running Google’s Android system are starting to come with a wireless technology that can let phones make payments with the tap of a reader. Apple’s patent filings hint at an interest in the technology, known as near-field communications, but the notoriously secretive company has given no clue when the technology might show up in iPhones. A new model is expected this autumn.
Beyond protecting payments, a fingerprint system could keep unauthorised people from accessing email, contact lists and more. Current phones offer protection through passwords, which can be guessed or forgotten.
AuthenTec said Apple Inc is paying $8 for each of its common shares, a 58 per cent premium to their closing price on Thursday.
AuthenTec’s stock jumped $3.27, or 65 per cent, to $8.34 in Friday afternoon trading, above Apple’s offer. That could suggest investors think there will be a higher bid for the company.
The deal was unanimously approved by AuthenTec’s board. It still requires approval from a majority of the holders of the Melbourne, Florida, company’s stock. AuthenTec has about 44.5 million outstanding shares, according to FactSet.
A higher offer for AuthenTec is possible. In a regulatory filing, AuthenTec said it’s not allowed to actively seek out other offers, but it could hold talks with other parties before its stockholders approve Apple’s buyout terms.
If AuthenTec does wind up accepting a superior offer, it would have to pay a break-up fee of approximately $11 million.
While Apple said earlier this week that its growth rate slowed in its latest quarter, massive sales of its iPhones and iPads in recent years have made it the world’s most valuable company. It’s the third-largest maker of cellphones, according to research firm Gartner, and dominates the market for tablet computers.
Shares of Apple, which is based in Cupertino, California, added $10.23, or 1.8 per cent, to $585.11.
Meanwhile, Apple and Twitter are currently not in discussions on the mobile technology giant taking a stake in the popular social networking site, sources familiar with the matter said.
Apple in recent months has held negotiations with Twitter to explore investing hundreds of millions of dollars in the company, The New York Times reported on Friday, citing people briefed on the matter. The Wall Street Journal said such discussion were held over a year ago, citing a person familiar with the matter.
It is unclear if the two companies talked about a deal in the past and at what level such discussions were held, but there are no current, formal talks between the companies on an investment or acquisition, the sources said.
Both Apple and Twitter declined to comment.
The iPhone and iPad maker typically does not take equity stakes in companies and prefers to acquire technologies by buying up smaller startups that are lesser known. Twitter executives have said repeatedly they are in no rush to seek additional financing, either privately or on public markets, since they have “truckloads” of cash.
Apple has never delved deeply into the social media space dominated by Facebook, but it has dabbled in trying to make music more social by launching a social network on iTunes called Ping, which has not caught on.
Twitter, the internet phenomenon with about 140 million users that allows people to “tweet” 140-character messages, is already well integrated into Apple smartphones and tablets. Apple customers can directly share their comments on Twitter when on their iPhones, iPads or Mac line of computers.
Twitter, the San Francisco-based startup that is viewed as the most significant candidate for the public markets following Facebook, is ramping up its efforts to generate revenue from the 400 million tweets that cross its networks daily.
