Analyst Positive on Gardner Denver (GDI) Ahead of Strategic Review Results

February 13, 2013 11:11 AM EST
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Price: $75.99 --0%

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In October, Gardner Denver, Inc. (NYSE: GDI) confirmed that its Board of Directors was exploring strategic alternatives to enhance shareholder value. These alternatives include, among other things, enhancing the Company's existing strategic plan or a possible sale or merger of the Company. Results of the strategic review are expected later this month February, on or around February 21st. While reports say suitors have indeed come forward, little is known about the prospects for a deal.

Commenting on recent developments, MKM analyst Joshua Pokrzywinski said, "We continue to like the risk/reward profile of GDI shares into the mid-February due date for final bids and the presumed update on the strategic review. While the cancellation of a sale process may lead to temporary disappointment, we no longer view the outcome as necessarily binary."

As an alternative to a sale, Gardner Denver may also consider a leveraged recapitalization, according to reports.

"With a leveraged recapitalization emerging as another option, a simultaneous announcement that the company is no longer for sale, but instead undertaking a sizeable repurchase program, should be positively received and at least partially mitigate the initial negative reaction. In our view, this makes having exposure ahead of an announcement even more attractive," said Pokrzywinski.

MKM Partners has a Buy rating on Gardner Denver Corp. with a price target of $82.00.

For an analyst ratings summary and ratings history on Gardner Denver Corp. (NYSE: GDI) click here. For more ratings news on Gardner Denver Corp. click here.

Shares of Gardner Denver Corp. closed at $68.28 yesterday.

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