Here's What Happens If Apollo Education Goes Private
If Apollo Education Group Inc (NASDAQ: APOL) becomes a private company, there may be "substantial" legal/regulatory challenges, according to analysts at Piper Jaffray.
Piper Jaffray analysts said in a note Tuesday that there would be a "significant barrier" for consolidation in the industry.
"While our valuation analysis suggests meaningful potential upside in a go-private transaction, we note that legal and regulatory considerations create a meaningful challenge to closing a transaction," the firm commented.
The firm's price target for Apollo Education Group is unchanged at $9 and they maintained a Neutral rating for the stock due to factors considered such as the "significant regulatory hurdles" to closing the transaction and underlying fundamentals which remain "weak."
Apollo does have a chance of overcoming the regulatory, financial and legal challenges to finalize its sale transaction, and Piper Jaffray believes the company's valuation upside "could be meaningful" if the challenges are addressed.
"Department of Education and accreditor approval will be required for a change in control and both sets of regulators have shown reticence to approve transactions involving acquisitions by for-profit enterprises," the firm noted. "Given a lack of recent precedent transactions, it is difficult to put probabilities on a transaction closing, despite economics that look appealing."
Latest Ratings for APOL
Jan 2016 | BMO Capital | Maintains | Outperform | |
Oct 2015 | Deutsche Bank | Maintains | Hold | |
Jun 2015 | Bank of America | Downgrades | Neutral | Underperform |
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