Best India Stocks To Invest In Right Now: Reynolds American Inc(RAI)
Advisors' Opinion: - [By Shauna O'Brien]
On Friday, tobacco company Reynolds American, Inc. (RAI) reported a public offering of $1.1 billion aggregate principal amount of senior notes.
The notes include $500 million aggregate principal amount of 4.850% Senior Notes due 2023 and $550 million aggregate principal amount of 6.150% Senior Notes due 2043.
RAI plans to use the funds obtained from the notes to buy back $200 million of the outstanding principal amount of its 7.300% notes due in 2015 and the $775 million outstanding principal amount of notes due in 2016.
Reynolds American shares were mostly flat during pre-market trading Friday. The stock is up 16% YTD.
- [By Ben Levisohn]
Reynolds American (RAI) topped the S&P 500 today after receiving a bid from British American Tobacco (BTI) that values the stodgy tobacco stock at $$56.50 a share.
Getty Images Shares of Reynolds American soared 14% to $53.78 today, while the S&P 500 finished little changed at 2,141.16.
Cowen’s Vivien Azer and Aaron Grey call the “multiple offered for Reynolds American quite compelling.” They explain why:
British American Tobaccois proposing to acquire the outstanding 58% of RAI that it does not already own. The offer of $56.50 / share is comprised of $24.13 in cash, and the rest in BAT shares. The deal constitutes a 16.3x EBITDA multiple, which we view as quite attractive in the tobacco landscape (in particular, as it represents a healthy premium relative to the 13x that RAI paid for Lorillard)…
We view the multiple offered for RAI as quite compelling. That said, CEO Susan Cameron has distinguished herself by creating exceptional shareholder returns via both the acquisition of Lorillard as well as the $5 bn sale of Natural American Spirits international business to JT. As such, we would not rule out the possibility of R! AI negotiating a modest premium relative to this offer. We would note that we would not expect these negotiations to be protracted, given that this deal could face far less regulatory scrutiny (as unlike theLorillard deal, we do not see any meaningful antitrust issues). Maintain Outperform rating on Reynolds American.
Thanks to the takeover offer, Reynolds American, which reported net income of $3.3 billion on sales of $10.7 billion in 2015, saw its market capitalization jump to $76.8 billion today from $67.3 billion yesterday.
- [By Benzinga News Desk]
Jefferies started Altria Group (NYSE: MO) at Hold and Reynolds American (NYSE: RAI) at Buy.
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source from Top Stocks For 2015:http://www.topstocksblog.com/best-india-stocks-to-invest-in-right-now-6.html
