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Nov. 25, 2015, 2:14 PM
- 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)
American Capital Ltd is an asset management and private equity firm. The Company originates, underwrites and manages investments in the middle market private equity, leveraged finance, real estate, energy and structured products.
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