Market Overview

Telsey Says Apollo's Fresh Market Buyout Make Sense For Both Companies


Shares of The Fresh Market Inc (NASDAQ: TFM) were trading up more than 23.7 percent on Monday, after the company accepted a buyout offer from an affiliate of Apollo Global Management LLC (NYSE:APO). The acquirer offered $28.50 per share, or roughly $1.36 billion for the retailer.

Apollo’s offer carried a 24 percent premium to the stock’s Friday closing price, and more than a 50 percent premium to early-February prices, before the stock spiked on speculation over a potential buyout.

Related Link: The Road To A Merger: The Fresh Market

Benzinga spoke with Joseph Feldman, analyst at the Telsey Group on the acquisition.

When asked about whether this deal makes sense for each company, Feldman said Apollo has experience in the space and evidently saw in The Fresh Market an opportunity, a company with decent store space and a chance to become more efficient.

Speaking on the management team, especially CEO Ray Berry, being on the same page was the founder regarding the strategic review (which led to the sale of the company), Feldman said that Berry was the one who actually coordinated this deal. The recent CEO was more of a “caretaker" and his role was to either come in and fix the business or prepare the company to sell, and he did his job.

However, Feldman concluded, this is probably as far as he'll get as private equity firms usually bring their own management teams.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

Latest Ratings for TFM

Apr 2016TerminatesNeutral
Apr 2016DowngradesOverweightEqual-Weight
Mar 2016UpgradesUnderweightEqual-Weight

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