Is a ‘For Sale’ sign hanging around the necks of Manny, Moe and Jack?
That’s the Wall Street scuttlebutt being proffered by Tony Cristello, managing director of BB&T Capital Markets-Equity Research in an update report this morning.
“Are Manny Moe & Jack In High Demand?” reads Cristello’s report. “What a wild day for PBY as the shares nearly hit $16 and finally settled up 14.9% at $14.15 as news of the potential exploration of strategic alternatives fueled speculation that the company was in play.
“Management declined to comment, and perhaps in doing so affirmed that it was in fact shopping the company,” he said.
As for a potential buyer, Cristello said: “We do not foresee any strategic buyers that would be interested in PBY, but rather if the company was to be sold we believe that private equity would likely be involved. Although it’s possible that an international buyer could have some interest similar to when Sumitomo acquired TBC in 2005 for purposes of distribution or when Japan’s Autobacs Seven acquired Strauss Auto out of chapter 11 in 2007.”
But after all of that, Cristello closed out his report by backing off his bold opening. “Ultimately, we think that there are more efficient ways to gain distribution capabilities for a service model roll-up than through a purchase of Pep Boys. In our opinion a private equity transaction, while not unfeasible at current levels given current interest rates and the amount of equity capital available, is unlikely.”
