UPDATE: BMO Upgrades MeadWestvaco to Perform, Raises PT to $33
In a published report, BMO Capital Market upgrades MeadWestvaco (NYSE: MWV) to Market Perform from Underperform and raises its price target to $33 from $27.50 as the company reached a definitive agreement to spin off consumer and office products business.
BMO comments, “MeadWestvaco will merge the business with ACCO Brands (NYSE: ABD). The tax-efficient reverse Morris Trust is currently valued at $972 million to MWV (ABD stock price at $8.98/share) and its shareholders on a pre-synergy basis. Synergies are estimated at $20 million by 2014 and, longer term, $30 million p.a. The transaction is expected to close at the end of H1/2012. MWV shareholders will receive one share of ABD for three of MWV, and MWV will receive $460 million in cash.”
MWV closed at $29.10 per share, down 1.39 percent, on Friday.
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Tags: BMO Capital Markets