Time Warner (TWX) PT Raised to $107.50 at Nomura Following Deal
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Nomura Securities analyst Anthony DiClemente raised his price target on Neutral-rated Time Warner (NYSE: TWX) to $107.50 (from $85.00) after the company agreed to be acquired by AT&T for $107.50 a share (50/50 cash and stock), a 36% premium to Wednesday's close (prior to reports of a potential acquisition) and a total transaction value of $108.7bn; the acquisition values TWX at 17.6x our 2017 EPS estimate, and is expected to close by year end 2017.
DiClemente commented, "... we raise our TP to $107.50, as we assume that the transaction clears regulatory reviews. In TWX, AT&T would gain access to a plethora of high-quality media content, to be distributed in presumably new ways across AT&T's mobile video platform, including the soon-to-belaunched DTV Now. We also think the acquisition may represent a positive lateral read on the broader value of media assets; however, we really do not anticipate a wave of Media M&A activity triggered here, given the lack of clearly visible content/distribution synergies and given closely held ownership structures."
Shares of Time Warner closed at $89.48 yesterday.
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