Boyar Research was featured in a Forbes article on January 18th penned by Gene Marcial, who authored Business Week’s highly influential column Inside Wall Street for 28 years. The article discusses why 2016 could be another good year for mergers and acquisition activity and also mentions some companies that we follow that could be potential takeover candidates.
Expect Surge Of M&A Deals From Market’s Plunge
The deterioration of equity valuations resulting from the market’s perilous pullback has created an environment that very likely will re-accelerate merger-and-acquisition transactions among the investor activists and private equity players, as well as corporate predators out to capture underpriced assets.
Aggressive activist investors, like Carl Icahn and Bill Ackman, who already have initiated efforts to acquire particular companies they believe are suffering from uninspired leadership or mismanagement, would be more encouraged to pursue their quarries more vigorously. “There could be a fair amount of leveraged-buyouts (LBOs) in 2016 as many companies are trading at 30%-40% (or more) below their highs, and an opportunistic management team or private equity shop may try and take advantage of this temporary dislocation in the marketplace,” says Jonathan Boyar, president of Boyar’s Intrinsic Value Research.
Surely there also will be a rush to initiate strategic M&As, “particularly in the media space, as content companies need to combine in order to compete in the rapidly evolving media landscape,” notes Boyar. A number of media companies that had been tagged last year as likely targets, he adds, have now become even more vulnerable.
Boyar says among media companies that he believes are potential takeover candidates include Time Warner (TWX), whose stock has plunged to $69 a share last week from its high of $91 in July, 2015, Discovery Communications (DISCK), which has dropped to $25 from a high of $32, and MSG Networks (MSGN), which has fallen to $19 from $21.
And “I wouldn’t be surprised to see some retailers taken private,” says Boyar, such as Kohl’s Corp. (KSS), whose stock has tumbled to $40 from $50, and Staples (SPLS),” down to $9 from $12.
Boyar points out that approximately 40% of the companies profiled in Boyar Intrinsic Value Research’s newsletter, “Asset Analysis Focus,” have been acquired since it started publishing in 1975.
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