Realogy Buyout: Scoop Up Some Spare Change

by: Brian Harper, CFA

The vote on Realogy's (NYSE:H) buyout by Apollo Management, LP is scheduled for March 30, and assuming shareholders approve it, the deal is expected to close in early to mid-April.

Given the current softness in the market, particularly anything associated with residential real estate, it's very likely that the deal will go through. We think a private equity buyer is less likely to get skittish than if Realogy were being purchased by a peer.

Realogy shares, however, were off 2% yesterday, in-line with the market, and it looks like there is an opportunity to scoop up some spare change.

Realogy shares are trading at $28.85. Should the deal go through, buyers will earn the $1.15 difference, around 4%. Assuming the deal closes in a month, that comes to nearly 60% annualized.

Of course, should the deal fall through, shares would likely tank.

Disclosure: We own shares of Realogy.

H 8 month chart: