PGT innovations (NYSE:PGTI) got 12% after the company adopted a limited shareholder rights plan after an unidentified strategic investor accumulated shares.
The “poison pill” becomes exploitable if an entity, person or group acquires beneficial ownership of 10% or more PGT innovations (PGTI) shares, according to a statement on Friday. The entitlement plan expires in one year.
“We believe there are other private players who could logically be potential buyers, and we think a multiple in the range of ~10x EV/EBITDA or a share price of $33 would be reasonable,” Jefferies analyst Philip Ng, who has a buy rating and a $28 price target on the stock, it said in a note on Friday.
The 10x multiple seems reasonable since Masco ( MAS ) sold its Milgard Windows business for ~10.7x 2019E EV/EBITDA to a strategic player, and PGTI “offers faster growth and is a much higher quality business,” Ng added.
A multiple of 10x implies a share price of ~$33 or a potential upside of ~29% from the current price.
Evercore is acting as financial advisor to PGTI and Davis Polk & Wardwell LLP is acting as legal advisor to PGTI.