Pace shares fell sharply at the end of last week following a report that two of its US customers - AT&T and DirecTV - could agree a takeover deal.
Investors were concerned that if AT&T bought DirecTV, the UK company's orders could be affected. Pace derives around half of its revenues from north America in 2013.
But analysts at Barclays said the falls were overdone:
While we understand the immediate concerns for Pace (AT&T, DirectTV and Comcast together represent around 57% of Pace's revenue), we believe the potential outcome from such consolidation - if it is agreed to by the companies and approved by the US Department of Justice and the Federal Communications Commission - would be a net positive for Pace.
The pressure on Pace shares is undeserved in our view and we advise investors take advantage of a share price [which is] 30% off the March 13 peak. This is all the more true in that Pace just a week ago reiterated 2014 guidance and it is ahead of plans with the integration of recently acquired Aurora, generating more cash than previously anticipated and re-opening sooner the window for further potentially accretive acquisitions. We reiterate our overweight rating and see fair value at £5.00.
Pace - which fell to 337p on Friday - has recovered 13.6p to 350.6p.
