RetailMeNot Inc (NASDAQ:SALE) investors are overwhelmingly excited today, following the news that Harland Clarke Holdings agreed to acquire the online discount and coupons company for $11.60/share in cash, equivalent to equity value of ~$630MM. The purchase price represents a ~50% premium over yesterday’s closing price of $7.75.
CEO Cotter Cunningham commented, “This is an exciting and important milestone for RetailMeNot […] Not only are we delivering an immediate and significant cash premium to our stockholders, but we are also meaningfully advancing our goal of becoming a leading savings destination for consumers. This acquisition is a testament to the unwavering commitment and hard work of our 500 plus dedicated employees. Having founded RetailMeNot over seven years ago, I firmly believe that Valassis not only shares our commitment to consumers and merchant partners, but supports continued innovation in driving new solutions for retailers and brands. I am confident in the future of RetailMeNot in its partnership with Valassis and look forward to working closely with the combined team to ensure together we become the premier savings destination.”
Jefferies analyst Brian Fitzgerald said, “By bringing together Valassis’ unmatched quantity of valuable offers from its large, diversified client base with RetailMeNot’s digital audience distribution and brand, the companies’ combined offerings will become the consumer savings destination of choice. This transaction advances RetailMeNot’s goal of becoming a leading savings destination, and is a natural step forward in the growth trajectory of the company. The combined companies will create an omni-channel media network with over 58K advertisers reaching hundreds of millions of consumers around the world.”
Fitzgerald downgrades shares of RetailMeNot from Buy to Hold, while reducing the price target to $11.60 (from $12.00). In addition, Credit Suisse analyst Paul Bieber upgraded SALE to Hold.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Paul Bieber and Brian Fitzgerald have a yearly average loss of 7.4% and a return of 14.7% respectively. Bieber has a success rate of 46% and is ranked #4076 out of 4560 analysts, while Fitzgerald has a success rate of 69% and is ranked #98.
Overall, 4 research analysts have assigned a Hold rating and . When considering if perhaps the stock is under or overvalued, the average price target is $11.60 which is 49.7% above where the stock closed yesterday.
RetailMeNot, Inc. operates as a digital coupon marketplace. It operates through the Gift Card and Core segments. The Gift Card segment consists of the marketplace for gift cards. The Core segment handles all of the other products and services that are related to the marketplace for digital offers.