FBR Capital Maintains an 'Outperform' on Tyco International (TYC); Value Enhancing Catalyst Coming? A Closer Look at Strategic Options
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Price: $45.59 --0%
Rating Summary:
9 Buy, 10 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
9 Buy, 10 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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FBR Capital maintains an 'Outperform' on Tyco International (NYSE: TYC).
FBR analyst says, "Over the past several days there has been media report regarding a possible takeover of Tyco with Schneider and Siemens mentioned as potential acquirers. While we do not have any information on whether Tyco is up for sale or if any of these European companies are evaluating Tyco’s takeover, we would not be surprised to see a shareholder value enhancing catalyst play out including a further breakup of the company. Tyco’s persistent and steep valuation discount to peers and to its sum-of-parts value, despite solid fundamental performance, could be a motivating driver behind any such decision. We note CEO Ed Breen and the Tyco board have a track record of making tough decisions to help enhance shareholder value including the break-up legacy Tyco in 2006-2007 and management has commented in the recent past that the company is always looking at options to increase value for shareholders. One strategic option would be a sale of the company with large European industrial companies potential acquirers. Another option would be a break-up into three separate companies which could help bridge the gap with the Sum-of-the-parts value of $58-$62. In this report we present our new Tyco’s SOTP valuation with updated public company and/or recent transaction comps for each business and also present our views on pertinent questions relating to these potential strategic options. Regardless of the type and timing of the strategic move/catalyst, we believe Tyco shares present a solid investment opportunity and would be buyers at current levels."
For more ratings news on Tyco International click here and for the rating history of Tyco International click here.
Shares of Tyco International closed at $48.72 yesterday.
FBR analyst says, "Over the past several days there has been media report regarding a possible takeover of Tyco with Schneider and Siemens mentioned as potential acquirers. While we do not have any information on whether Tyco is up for sale or if any of these European companies are evaluating Tyco’s takeover, we would not be surprised to see a shareholder value enhancing catalyst play out including a further breakup of the company. Tyco’s persistent and steep valuation discount to peers and to its sum-of-parts value, despite solid fundamental performance, could be a motivating driver behind any such decision. We note CEO Ed Breen and the Tyco board have a track record of making tough decisions to help enhance shareholder value including the break-up legacy Tyco in 2006-2007 and management has commented in the recent past that the company is always looking at options to increase value for shareholders. One strategic option would be a sale of the company with large European industrial companies potential acquirers. Another option would be a break-up into three separate companies which could help bridge the gap with the Sum-of-the-parts value of $58-$62. In this report we present our new Tyco’s SOTP valuation with updated public company and/or recent transaction comps for each business and also present our views on pertinent questions relating to these potential strategic options. Regardless of the type and timing of the strategic move/catalyst, we believe Tyco shares present a solid investment opportunity and would be buyers at current levels."
For more ratings news on Tyco International click here and for the rating history of Tyco International click here.
Shares of Tyco International closed at $48.72 yesterday.
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