Industrial analyst Jeff Sprague on Wednesday speculated about the possibility of a merger between industrial companies Eaton Corp (ETN.N) and Cooper Industries Plc (CBE.N), and Cooper shares jumped 6.3 percent. In a research note he called "speculative," Sprague, of Vertical Research Partners, said Cooper, with a current market capitalization of $7.2 billion, would be a big target for Eaton, but Eaton could afford such a purchase if it included an equity offering. He suggested Eaton might offer $60 per share, or $10 billion, for Cooper, a maker of electrical products. "Our analysis is completely speculative, but not far-fetched," Sprague said in the note to clients. "Management teams have generally stressed a preference for small bolt-ons, however we see some cases where stepping up the deal size makes sense." Shares of both companies are "cheap," Sprague said, and investors do not have a clear understanding of Eaton's identity, a problem such a deal could solve.
Eaton Corporation (Eaton) is a diversified power management company. Shares of ETN traded higher by 2.5% or $1.0/share to $41.05. In the past year, the shares have traded as low as $37.66 and as high as $56.49. On average, 4452420 shares of ETN exchange hands on a given day and today's volume is recorded at 1062284.
Cooper Industries plc (Cooper) is engaged in the manufacturing, marketing and selling of electrical products and providing services worldwide. Shares of CBE traded higher by 6.92% or $3.01/share to $46.50. In the past year, the shares have traded as low as $41.15 and as high as $70.00. On average, 1806790 shares of CBE exchange hands on a given day and today's volume is recorded at 992345.
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