UPDATE: Piper Jaffray Raises PT on Hot Topic to Acquisition Price

Piper Jaffray published a research report on Hot Topic HOTT that raised the price target from $12 to $14 after the announcement that the company would be acquired by Sycamore Partners. In the report, Piper Jaffray wrote, "We are standing by our Overweight rating on HOTT shares in view of the announced acquisition by Sycamore Partners for $14/share, representing ~8x FTM EBITDA and a 30% premium to yesterday's closing price. We view the acquisition price as fair for the current business structure. Our longer-term view ascribes even greater value to the Torrid division as that business is backed by a strong secular demand profile and core operating metrics on a pathway of improvement. We are revising our price target to $14/share to align with the take-out price. We believe a secondary bidder could emerge, but at this juncture, we view the current take out offer as reasonable." Piper Jaffray maintained its Overweight rating on Hot Topic, which closed Wednesday at $10.75.