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Seacube hits all-time high on buyout deal

NEW YORK (AP) -- Seacube Container Leasing's stock hit an all-time high Tuesday after the shipping-container leasing company agreed to be acquired by the Ontario Teachers' Pension Plan for $466.9 million.

THE SPARK: Seacube announced late Friday that it would be purchased by the pension plan for $23 per share. This is a 13 percent premium to the Park Ridge, N.J., company's Friday closing price of $20.30.

Seacube currently has about 20.3 million outstanding shares, according to FactSet.

Seacube's board unanimously approved the deal, which is expected to close during the first half of the year. The transaction still needs the approval of Seacube shareholders.

THE ANALYSIS: Sterne, Agee and Leach's Sal Vitale said in a client note that the offer is a fair price for Seacube.

The analyst said that the buyout shows the attractiveness of the container leasing sector, as container lessors have solid long-term growth potential tied to emerging market trade growth, with low risk, steady cash flow and high dividend yields.

The analyst kept a "Buy" rating and $22 price target.

Christian Wetherbee of Citi Investment Research cut Seacube to "Neutral" from "Buy" but raised Seacube's price target to $23 from $21 to keep it in line with the buyout offer.

Wetherbee said that it looks like Seacube had a competitive bidding process for the company and that the pension plan won. Since the analyst believes multiple parties were already involved in the bidding process, he doesn't anticipate any other bidders coming forward.

SHARE ACTION: Shares of Seacube Container Leasing Ltd. rose $2.70, or $13.3 percent, to $23 in morning trading. Earlier in the session the stock reached an all-time high of $23.05.