TEN - Tenneco raised at JPMorgan as sale to Apollo likely to close on agreed terms

Tenneco (NYSE:TEN) was raised to overweight at JPMorgan as the auto supplier's $7.1 billion sale to Apollo Global (APO) is likely to close on the agreed upon terms. Tenneco ticked up 0.7%. JPMorgan analyst Ryan Brinkman sees three potential scenario for the $20/share deal with 1) the transaction closes on agreed terms, 2) the deal is renegotiated at a lower price and 3) the transaction is terminated, which he see as less likely, though it does contain "substantial" downside risk. In the case of a deal termination, Tenneco (TEN) shares could retreat to as low as ~$9.30/share, according to Brinkman. There's a potential for TEN to trade even lower given higher than sector average leverage. "Clearly, this substantial downside risk has kept many investors on the sidelines, but it is also what  enables the  atypically high  +16% upside opportunity (more than  +32% annualized, should the transaction close on the agreed upon

For further details see:

Tenneco raised at JPMorgan as sale to Apollo likely to close on agreed terms