July 13 (Bloomberg) -- Andritz AG rose for a second day after UBS AG said that its acquisition of German metal-forming machine-maker Schuler AG may be a “bargain.”
Shares climbed 2.3 percent to 41.6 euros at the 5:30 p.m. close of trading in Vienna. Andritz stock has advanced 30 percent this year, valuing the world’s second-biggest maker of hydro-power turbines at 4.3 billion euros ($5.3 billion).
“The Schuler acquisition will, in our view, add a high-quality machinery company to Andritz,” Sven Weier, an analyst at UBS in Frankfurt, wrote in a note to customers. “The purchase price could turn out to be a bargain if auto capital expenditure does not collapse as it did after Lehman, and if Andritz succeeds on obvious synergies such as cross-selling and execution.”
Schuler’s supervisory and management board yesterday said Andritz’s offer price of 20 euros a share was “financially adequate” and recommended shareholder accept the offer.
“We may sound like a broken record but Andritz remains our key pick,” Weier said. He rates Andritz at buy and raised its share price estimate to 49 euros from 45 euros.
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