Wedbush Launches Coverage On Ann Inc. With 'Mixed View'

Ann Inc.'s

best prospects as an investment lie it its potential as a takeover target, an analyst said Wednesday. Two activist hedge funds earlier this week again urged Ann's board to consider putting the company on sale. Wedbush's Morry Brown said the retailer's shares are "fairly valued" based on the company's business. "Upside depends on merger activity," Brown said in a note which didn't comment further on merits of a merger. Brown said he held "a mixed view" on Ann's near-term earnings prospects, and launched coverage on Ann with a Neutral rating and $43 target. Two activist hedge funds earlier this week again urged Ann's board to consider putting the company on sale. Engine Capital and the investment advising firm Red Alder, which together hold about a 1 percent stake in Ann, repeated their similar call of last month, although its estimate of the company's value in a sale rose Monday to as much as $65 a share, from $55 in its August letter. In a statement Monday, Ann said it had met with representatives of the two funds and "none of the analyses contained in their presentation is new to the board." Ann traded recently at $41.25 a sharea, down 1.2 percent.