EXCLUSIVE: Benchmark's Daniel Kurnos Thinks Angie's List Has Been A 'Broken' Stock, Would Be Better Served As Part Of IAC
- Shares of Angie's List Inc (NASDAQ: ANGI) spiked higher by nearly 15 percent Thursday after the company confirmed it has received an acquisition offer from IAC/InterActiveCorp (NASDAQ: IACI) for $8.75 per share.
- Speaking to Benzinga, Benchmark's Daniel Kurnos said that Angie's List's stock has been "broken."
- Kurnos added that Angie's List would be better served as part of IAC.
Shares of Angie's List hit a new 52-week high of $9.12. The company confirmed in a press release that it received an unsolicited proposal from IAC to acquire the company for $8.75 per share in cash, or form a combination of Angie's List with IAC's HomeAdvisor business through a tax-free stock-for-stock exchange.
Benchmark's Daniel Kurnos was a guest on Benzinga's #PreMarket Prep Show on Thursday and discussed the proposed acquisition.
According to Kurnos, Angie's List's stock has been "broken" given the Board of Director's repeated failure to prove they represent a company that can make money. As such the company would be "much better served" as a part of IAC. The analyst also suggested that IAC would be the best suitor for Angie's List and "would definitely get the greatest amount of synergies" given the fact that IAC has been operating in the space for a "long time" and has "already laid the initial groundwork."
Kurnos also noted that a $9 per share offer is a fair value even if the Board of Directors were hoping for an offer in the teens range.
"Baring some miraculous turnaround given the increasing competition in the space, to us, it certainly makes sense to take IAC's proposal, and to do so in a stock transaction rather than a cash transaction," Kurnos said.
Kurnos explained that Angie's List shareholders would be better off owning IAC's stock, which can appreciate from future synergies under a joint combination.
Kurnos added that other potential acquirers would need to "build out" a platform only to "face the same uphill battles" that Angie's List is already facing. As such, the analyst said it is not likely another potential acquirer will emerge in the coming days, although he did acknowledge it is possible.
Kurnos also discussed the broader industry, noting that Yelp Inc (NYSE: YELP) is an "interesting stock to pay attention to" as the company has "multiple angles," particularly in travel and local. As such, the analyst suggested that Yelp, along with GrubHub Inc (NYSE: GRUB), are "likely to be on the radar for some of the larger players."
On the other hand, Kurnos suggested that Blucora Inc (NASDAQ: BCOR) is in "acquirer mode" and unlikely to be an acquisition target.
Latest Ratings for ANGI
|Feb 2017||Roth Capital||Downgrades||Neutral||Sell|
|Aug 2016||Raymond James||Upgrades||Market Perform||Outperform|
|Aug 2016||Loop Capital||Initiates Coverage on||Buy|
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