Boston, MA 05/05/2014 (wallstreetpr) – The $10 billion market capped maker of aircraft seats B/E Aerospace Inc (NASDAQ:BEAV) has hired financial and legal advisers to help it explore options about its next move. The company cancelled an investment meeting scheduled for today to look into possible sale or business spinoff.
The company has hired Citigroup Inc (NYSE:C) and Shearman & Sterling LLP to assess alternatives for its next step. The board has not yet made up its mind on what is best for the company between assets spinoff and a complete sale of the company. Therefore, the assessments should inform the next line of action.
Shares of B/E Aerospace Inc (NASDAQ:BEAV) jumped in early trading today.
Surprise move
The latest developments in B/E Aerospace Inc (NASDAQ:BEAV) signal a U-turn given that just a few weeks ago the company’s CEO Amin Khoury said the company had entered agreements with two undisclosed companies for possible acquisition. It was hard to tell that the company would consider selling itself.
The remark that the company was considering to acquire two companies came on the back of a solid quarter that the CEO declared as the best in the company’s history that spans 27 years. The company reported Q12014 EPS of $1.06, beating the consensus estimate at $1.01 per share. The company reported earnings per share of 87 cents in Q12013. Revenue in the quarter was $1.01 billion, exceeding the consensus estimate of $960.25 million. Revenue in the most recent quarter was up more than 20 percent above a year earlier quarter.
Analysts optimistic over latest developments
Though the latest development that could put B/E Aerospace Inc (NASDAQ:BEAV) on the auction board might come as a surprise, one analyst believes that the whole thing hinges on maximizing value for the shareholders. According to Howard Rubel, an equity analyst at Jefferies LLC, the stock is a “buy.”
He observed that the company has outperformed the market due to the solid internal executions that still bear great promise for the company’s future.
In a note to investors, Mr. Rubel said that B/E Aerospace Inc (NASDAQ:BEAV) could be sold for as high as $107 per share based on various sets of transactions. If that be the price, it will be about 20 percent above the closing price of the stock last week. The analyst also believes at 85 percent that the company will decide on selling itself rather than spinning off operations.
The company made eight acquisitions over the past five years where it spent about $1.6 billion in the transactions.
