H&F To Buy At Home For $2.8B; Investors To Receive $36 Per Share

Home decor superstore At Home Group Inc. (HOME) has agreed to be acquired by private equity firm Hellman and Friedman (H&F) for a total cash consideration of $2.8 billion, inclusive of debt assumption. Shares of the company closed about 20.5% higher following the announcement.

At Home shareholders will receive $36 in cash for each share held. This represents an approximate 25% premium to the company’s VWAP over the last 30 days. The transaction is expected to close in 3Q.

At Home’s Chairman and CEO, Lee Bird said, “As we enter the next chapter for our company, H&F is the ideal partner to advance our At Home2.0 long term strategy. Together with H&F, we will have the resources and flexibility to provide our customers with a differentiated experience that meets their evolving needs.” (See At Home stock analysis on TipRanks)

Yesterday, Wells Fargo analyst Zachary Fadem reiterated a Hold rating on the stock but raised the price target to $37 from $30. Fadem thinks a deal “makes sense” at present as beginning in the second quarter, there are risks to the “story“, such as slowing demand and difficult comparisons. Fadem believes that due to these factors, At Home may not see a competing offer.

Consensus on the Street is that At Home is a Moderate Buy based on 4 Buys, and 3 Holds. The average analyst price target of $34.57 implies 8.3% potential downside. Shares have surged about 1237.2% over the past year.

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