Avaya Holdings Corp (NYSE: AVYA) is making a run for the top in the market today, and for good reason. Reports are surfacing that the software vendor is considering a leveraged buyout offer. Today, we’ll talk about:
- The LBO news;
- what we’re seeing from AVYA stock as a result; and
- what we’ll be watching for ahead.
AVYA Climbs On LBO Consideration
As mentioned above, Avaya Holdings is having an incredibly strong start to the trading session this mroning after reports surfaced that the company is considering a leveraged buyout offer.
According to the report, a private-equity firm is valuing the software vendor at more than $5 billion. This figure includes the assumption of debt.
The report comes with some validity as it was originally published on Reuters, citing people familiar with the matter. The report suggests that AVYA is considering an offer that values the company at more than $20 per share.
On Friday, the stock closed at $13.21 per share. This led to a market cap of about $1.5 billion. The company also had about $3.2 billion in devt as of the end of the most recently reported quarter.
The report suggested that the PE firm that made the offer could not immediately be learned. However, the company has attracted acquisition interest from more than one PE firm over the past few months.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. When it comes to Avaya, the news proved to be overwhelmingly positive.
While there is nothing set in stone here, an acquisition would be great news, likely returning a decent amount of value for investors. So, it’s not surprising to see that excited investors are pushing the stock for the top.
As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (10:25), AVYA is trading at $17.72 per share after a gain of $4.49 per share or 3.94% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on AVYA. In particular, we’re interested in following the story surrounding the interest of PE firms in the company. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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