Rockwell Collins could be acquired for $145 per share
After Reuters and Bloomberg reported that United Technologies (UTX) had made an unconfirmed bid to buy Rockwell Collins (COL), RBC Capital analyst Matthew McConnell estimates that Rockwell Collins could be acquired for $145 per share.
Shares of the maker of avionics and cabin interiors spiked in late trading on Friday after Bloomberg News reported United Technologies Corp. was considering buying the $19 billion company. The idea of a Rockwell Collins purchase isn’t new. Last year, Starboard Value reportedly pushed management to pursue a sale rather than proceed with a takeover of airplane seat-maker B/E Aerospace (that deal closed in April). But it’s jarring to see United Technologies thinking seriously about it.
The analyst says that the deal would strengthen United Technologies and has “ample strategic rationale,” although he notes that airplane makers have expressed opposition to similar deals in the past.
He adds that the deal “would move” United Technologies “up the technology curve” and enable it to enter the avionics business which he says has high barriers of entry.
#McConnell thinks that there is a 50% chance of a deal taking place and raised his price target on Rockwell Collins to $133 from $120. He keeps a Sector Perform rating on Rockwell Collins.
To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners. We offer stock picks, option picks, daily stock upgrades, stock downgrades, and earnings.
The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.