Barrons.como9 hours ago

Joy Global: Some Investors are Taking a Bath on the Buyout

Joy Global (JOY) announced that it would be bought for $3.7 billion including debt by Japan's Komatsu. Citigroup's Timothy Thein explains why Joy Global is selling now--and why some investors might not be too happy with the $28.30 a share purchase price: JOY's decision to sell now, when global coal prices are showing signs of life, and equipment orders may have found a bottom, signals to us that it likely sees modest near-term recovery potential, consistent with our own expectations (and Caterpillar (CAT) Resource estimates)... Unlikely a Competing Bidder Will Emerge: We see low likelihood of a competing bid, especially given the strain that the mining downturn has put on industry balance sheets (including prospective Chinese suitors) and low stated interest from European players to expand in soft rock.