UPDATE: Cantor Fitzgerald Downgrades Nash-Finch Following Spartan Stores Merger Announcement

In a report published Tuesday, Cantor Fitzgerald analyst Ajay Jain downgraded the rating on Nash-Finch NAFC from Buy to Hold, but raised the price target from $24.00 to $26.00.

In the report, Cantor Fitzgerald noted, “We are downgrading Nash Finch to HOLD on valuation, following the recent announcement about its planned merger with Spartan Stores. Under the all stock merger, NAFC holders will get 1.2 units of SPTN for each NAFC share. Based on yesterday's ending share price, we estimate the market is valuing the combined entity at an EV of around $1.4 billion (slightly higher than the $1.3 billion combined valuation suggested in the merger announcement, including net debt). We are raising our price target to $26 from $24. While there is an opportunity for another buyer to acquire the Nash Finch assets, we don't think there is a catalyst to drive the stock materially higher in the nearterm.”

Nash-Finch closed on Monday at $26.24.