Is The Grill Heating Up? Here's What's Going On With Weber

Zinger Key Points
  • BDT Capital made an offer last week to purchase the remaining shares of Weber for $6.25 each.
  • Data from Fintel shows Weber has 43.6% of its float short.
Is The Grill Heating Up? Here's What's Going On With Weber

Weber Inc. WEBR shares opened on Monday at $6.78, or roughly $0.53 higher than the buyout bid it received from its majority shareholder last week.

Last Tuesday, there were 14,843 call option purchasers for the stock, a 71% increase over the 8,662 call option buyers each day on average.

What’s Going On? BDT Capital, the company's majority shareholder with an 86% holding and approximately 62% of the voting power, made an offer to purchase the remaining shares of Weber for $6.25 each.

The offer is 55% less than the grill manufacturer's $14 IPO in August 2021.

In a statement released last Tuesday, Weber stated that its board had established a committee to assess and take into account any potential transaction proposal from BDT, as well as any alternative proposals or other potential strategic alternatives that the company may be able to pursue.

Despite the fact that BTD's offer appears "generous," Citi analyst Chase Bender said last week that he believes the price may rise.

In mid-August, Weber traded at 26.9x EV/EBITDA, which works out to around $9.50 per share. According to Bender, a new offer between that price and the $6.25 offer wouldn't be surprising. Bender's price target is $2.75 with a sell rating.

Data from Fintel shows that Weber has 43.6% of its float short and a cost to borrow of 36.8%. This makes the stock rank ninth at the time of writing on its short squeeze leaderboard.

Weber has previously been featured as a top-five short squeeze candidate on Fintel in February and June.

Recently, Benzinga highlighted Weber as a short squeeze candidate to watch.

“Outdoor cooking company Weber Inc has been a former stock in the top five and is nearing a return to the top of the leaderboard. The company moved up 31 places to 13th place,” Benzinga reported.

The Bill and Melinda Gates Foundation own 2.5 million shares of Weber according to filings.

WEBR Price Action: Weber shares are down 0.45% to $6.69 Monday at publication.

Photo: MD_Photography via Shutterstock

Posted In: BDT CapitalBill and Melinda Gates FoundationChase BenderCitiAnalyst ColorM&APenny StocksSmall CapMarketsTrading IdeasGeneral