I thought that SPX FLOW (FLOW) offered a good return relative to its price back in late May, and apparently, Ingersoll Rand (IR) felt the same, as this would-be empire-builder in flow control made two bids for SPX FLOW this summer, including an $85/share all-cash bid, before walking away after SPX FLOW rejected its overtures.
Management has since initiated a “strategic review” but given the new strategic plan unveiled at the March Investor Day, consideration of a sale is really the only new option that could be on the table, and I think it will be tough to top an $85/share deal in the short term.
I do see meaningful self-improvement potential at SPX FLOW, and I’m always the guy going on about how “successful turnarounds can surprise and exceed investor expectations”. Turning down a no-risk $85/cash offer will no doubt lead to a little extra scrutiny on management’s execution of its turnaround/value creation plan, but I think they’re up to the task and patient investors may well be better off if they stay independent a while longer.
Read the full article at Seeking Alpha:
SPX FLOW's Go-It-Alone Strategy Is A Reasonable Bet On Its Turnaround Plan
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