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UPDATE: Piper Jaffray Dowgrades rue21, Inc. On Announced Take-Out

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Benzinga's M&A Chatter for Thursday October 10, 2013
rue21 Announces Funds Advised by Apax Close Purchase

In a report published on Thursday, Piper Jaffray downgraded its rating on rue21 (NASDAQ: RUE) from Overweight to Neutral and raised its PT on the company from $36 to $42.

In the report, analysts from Piper Jaffray commented that, "We are moving to a customary Neutral rating on RUE shares as the announced take- out at $42/share by private equity firm Apax Partners places shares at fair market value. We think the business model, with relative comp stability, favorable unit economics, and strong cash generation, makes for an opportunistic PE holding. Even in periods where sales trends have underperformed, as was the case in Q1, the company is able to flex its operating model to balance downside risk. At roughly 1.0x sales in terms of acquisition valuation, we think the target multiple is reasonable and sets a precedent for other potential acquisitions in the teen/youth retail space."

rue21 is up 22.71 percent on the day and currently trades at $41.87

Latest Ratings for RUE

DateFirmActionFromTo
Jun 2013JefferiesDowngradesBuyHold
May 2013Janney CapitalDowngradesBuyNeutral
May 2013Piper JaffrayDowngradesOverweightNeutral

View More Analyst Ratings for RUE
View the Latest Analyst Ratings

Posted-In: Piper Jaffray rue21Analyst Color Upgrades Analyst Ratings

 

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