HIBB - JD Sports' Acquisition Gives Great Value To Hibbett Shareholders

2024-04-23 10:30:04 ET

Summary

• JD Sports Fashion has proposed to acquire Hibbett at a price of $87.50 per share in cash, representing a premium of 20.7% from the previous day's stock close.
• The deal is subject to shareholder and regulatory approval, but I don't see any blocks in the transaction as likely.
• The acquisition price looks to be a good deal for Hibbett shareholders, as I see HIBB stock's fair value at less than the proposed transaction price.

Hibbett, Inc. ( HIBB ) today announced that JD Sports Fashion ( JDSPY , JDDSF) has proposed to acquire Hibbett at a price of $87.50 per share to be paid in cash, representing a premium of 20.7% from the stock’s close price on the 22 ^nd of April. The acquisition comes after relatively soft Q4 sales and a significant stock run. While the financials have performed well overall, I believe that the announced acquisition is promising for shareholders - I estimate the stock’s fair value to be less than the acquisition price through a discounted cash flow ("DCF") model....

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