BAP +13.99%: the best performer today was struggling auto retailer Bapcor after news broke of a $1.8b takeover by PE firm Bain Capital. The company confirmed media reports of Bain’s $5.40/sh offer sending the stock to its highest close in 6 weeks. Bapcor has been battling rising costs and into weakening demand, whilst also struggling to fill the CEO role, the last candidate walked from the position just days before his expected start date last month. Shares closed at an ~8% discount to the offer today given there is plenty of risk in the process from here. Bain’s offer is highly conditional at this stage with plenty of DD to play out. The board, and shareholders, will also have to judge whether $5.40 in cash offers enough given the high this year is over $6.30.
- We are long BAP in the Emerging Companies Portfolio, targeting $5.50 at this stage.
MM is bullish BAP
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