Linde Ag Sponsored Adr (LNEGY): A Deal Is Possible - Deutsche Bank
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Deutsche Bank analyst, Tom Jones, reiterated his Buy rating on shares of Linde (OTC: LNEGY) noting that a deal between Praxair and Linde is possible but complicated.
Newswires (WSJ, Bloomberg and Reuters) have reported on a possible tie-up of Praxair (PX.N, USD118.03, Hold) and Linde. It’s unclear who may bid for who as Reuters is saying that Praxair is bidding for Linde while WSJ and Bloomberg seems to talk about a merger of the two names.
The analyst stated "We do see a deal here as possible and note that we are firmly in the middle of a surge in M&A in the chemicals/gases space as CEOs look to drive profit growth in a soft macro, utilize strong balance sheets and take advantage of low interest rates."
Praxair’s shares have performed poorly in the past 1-2 years and management is under pressure to improve growth prospects. The analyst notes that Linde has had 2 profit warnings in the past two years and has similarly struggled to deliver robust profit growth.
No change to the price target of 150 Euros however this is not an indication of the fair value for a transaction.
Shares of closed at $15.55 yesterday.
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