- Ares Capital (ARCC -0.4%) CEO Kip deVeer has played down a whole lot of interest in launching some sort of consolidation wave in the BDC sector, but it could be the most logical buyer of American Capital (ACAS +8.2%) should the company put itself on the block, writes Gillian Tan.
- Even though Ares trades at a lower P/E multiple than ACAS, on a relative book value basis, American Capital is the cheaper stock, so a deal could make sense. As always, it'll come down to price, and Elliot Capital's price target of at least $23 per share - a 60% premium to yesterday's close - looks very steep.
- American Capital's board, and Elliot - whose average buy price is $13.30 - may have to settle for less.
- Previously: American Capital gains on strategic review, boost to buyback (Nov. 25)