IB Net Payout Yields Model

Is Liz Claiborne Going Private At $20 A Share?

The WSJ reported around noon on Friday that Liz Claiborne (LIZ) has been in talks with private equity firms over a potential deal around $20 a share. Currently, it doesn't appear that any of the firms, such as KKR & Co (KKR), Permira or Warburg Pincus LLC, find that price appealing. Not to mention that the Liz management has denied any interest in selling the company.

The news was enough to send the stock soaring. It closed at $13.36, up nearly 13% at a new 52-week high. At $20, Liz would have a value around $2B. Is that an appealing price for long investors?

First, lets look back to the recent transformation of the company. Back in October, I wrote an article about the transformation of the company. Just prior to that article, an investor could've bought Liz's stock in the $4s. Now the stock has tripled and a deal around $20 would've given an investor a 300% gain in less than six months.

Read the full article at Seeking Alpha.

Disclosure: Long LIZ. Please review the disclaimer page for more details. 


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