NCR Corp. (NCR) Rises on Take Over Bid
Shares of Duluth, Georgia, based NCR Corp. (NCR) rose on Tuesday, against the backdrop of a higher day in stocks overall. NCR's stock was up 10.71%, rising $3.36 per share, to close at $34.73, on volume of 12,333,396 shares. The company is rumored to be a take over target by private equity firms Blackstone Group (BX) and Carlyle Group (CG), in a leveraged buyout estimated to be valued at over $10 billion.
On Tuesday Reuters reported that Blackstone Group and Carlyle are offering to jointly take over NCR in a leveraged buyout worth more than $10 billion. Reuters reported that an auction for NCR is several weeks away from completion. The increase in NCR's stock price by more than 10% on Tuesday extends the gains in the company's stock for 2015 to 19% year-to-date.
NCR has not confirmed or commented on the offer, considering it as "rumor and speculation . No statements were issued by either Blackstone Group or Carlyle.
If completed, it will represent one of the largest leveraged buyouts since the 2008 financial meltdown. It would also represent an unusual joint venture buyout by two of the largest private equity firms. The offer could set up a potential bidding war, as other suitors, such as Apollo Global Management and Thoma Bravo might also make bids. NCR is already more than one-third owned by hedge funds.
The offer is seen as being rich. NCR has reported EPS declines in three of the past five quarters. For the first quarter of 2015, NCR's quarterly revenue fell for the first time since 2011. In addition, NCR's net income for 2014 fell to $181 million, down considerably from the $452 million reported for 2013.
The process is reportedly being managed by JPMorgan Chase & Co. The negotiations are in a very early stage and neither the company nor the private equity firms are in agreement on the price.
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