Zodiac Aerospace gains as much as 4.1% after Rockwell Collins agrees to buy B/E Aerospace for $6.4b.
- Oddo upgrades to buy from neutral, raises PT to EU25.70 from EU21
- Says the COL/BEAV deal is likely to change the mood of Zodiac controling family and make them more receptive to a sale
- Remains more interesting for a peer to buy Zodiac now, before restructuring
- Oddo now puts a 75% probability of a bid for Zodiac with a 30% premium
- Credit Suisse says announcement likely to boost Zodiac’s share price in short term
- Highlights valuation levels the stock may attract in an M&A deal
- Applying mechanically the COL/BEAV deal multiples to Zodiac 2017/18 est. forecasts gives equity value of EU34 per Zodiac share
- NOTE June 17: Zodiac CEO Says Co. Hasn’t Been Approached by Safran: Exane
- Zodiac Aerospace short interest is 5% of free float, 14 days to cover: Markit data
- Zodiac Aerospace is trading on 21.4x next year’s earnings vs 15.9x for the Stoxx 600 Industrial Goods and Services
- Stock has fallen -1% month-to-date vs a -0.1% fall in the Stoxx 600 Industrial Goods and Services index; is down -2.4% YTD vs a 3.2% rise in the SXNP index