Raymond James Does Not Expect Higher Bid For Cbeyond
Cbeyond (NASDAQ: CBEY) was downgraded to Underperform from Outperform by Raymond James after Cbeyond announced that it will be purchased by Birch Communications for $10 per share. Cbeyond shares have had a small reaction to the news, opening 0.2 percent lower than Friday’s close.
Frank Louthan of Raymond James does not see the deal falling through -- it has already been approved by both boards. However, Louthan does believe that a higher offer is likely, which warrants the Underperform rating. Louthan added more detail by stating that five times 2015 EBITDA and 18 times free cash flow, “are appropriate takeout multiples for the company given the trends in its business.”
The report also stated that Raymond James is raising its 2014 and 2015 estimates because depreciation and amortization were lower than previously expected.
Shares of Cbeyond were trading at $9.94 at last check.
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