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UPDATE: Jefferies Sees $54 LBO Price for BMC Software

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Shares of BMC Software (NYSE: BMC) are set to close Thursday's trading session up more than 3 percent following an earlier rumor KKR and TPG Capital have formed a consortium for an auction on the company. The stock spiked to an intraday high of $47.98 just after the headline.

Jefferies issued a late-afternoon note implying further upside of about 18 percent from current levels to a possible buyout offer.

The firm's Aaron Schwartz said, "Earlier, Reuters reported that select PE firms have expressed interest in BMC and the process is ongoing. BMC also amended its bylaws to push out its upcoming board nomination period. Combined, the developments align with our thinking that the event-driven status will intensify. Some of the speculation has been reflected in the stock but upside remains; our fair value target is $48 while our events driven team assigns a $54 LBO price."

Jefferies maintains a Buy rating on shares of BMC Software.

Latest Ratings for BMC

DateFirmActionFromTo
May 2013JefferiesDowngradesBuyHold
May 2013Janney CapitalDowngradesBuyNeutral
Jan 2013Cowen & Co.DowngradesOutperformNeutral

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