A Full Takeover of PSS World Medical (PSSI) Makes Sense - Analyst

July 12, 2012 11:43 AM EDT Send to a Friend
Get Alerts PSSI Hot Sheet
Price: $28.92 --0%

Rating Summary:
    0 Buy, 4 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 21 | Down: 43 | New: 52
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Despite a weak broader market, PSS World Medical (NASDAQ: PSSI) shares have a pep in their step this morning. This after analysts highlighted the company as a good takeover target.

Analysts at UBS note that now that PSSI has officially put some of its assets up for sale, "it would not be surprising to us if some of the logical parties that may be interested in buying the discontinued operations within PSSI may also be interested in potentially buying the whole company if it were for sale."

While the firm said their is not specific reason to believe this will be the case, they also note that late last week PSSI filed an 8-K disclosing changes in executive severance upon termination in the event of a change in control of PSSI,

McKesson Corporation (MCK) makes the most sense as a buyer, since it has the most operational overlap. Under a theoretical $35/share takeover, the firm notes a deal would be transaction would be ~5% accretive to EPS over 2-3 years.

The firm reiterated their Buy rating and price target of $26.

For an analyst ratings summary and ratings history on PSS World Medical click here. For more ratings news on PSS World Medical click here.

Shares of PSS World Medical are up 2.1 percent to $21.91.


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