Qlik Surges After Reportedly Bowing To Activist Wish To Seek Alternatives

The shares of Qlik Technologies (QLIK) are jumping after Reuters reported that the company had retained Morgan Stanley to explore strategic alternatives, including a possible sale of the company. In notes to investors, research firms SunTrust and RBC Capital wrote that several entities could look to buy Qlik, which develops business intelligence products.

WHAT'S NEW: Qlik is working with Morgan Stanley (MS) to explore strategic alternatives, including a potential sale of the company, Reuters reported on Friday, citing unnamed sources.

ANALYST REACTION: Qlik will probably "attract a range of suitors," wrote SunTrust analyst John Rizzuto. The company's healthy position within the enterprise business intelligence tools market and its strong client base will probably cause several suitors to attempt to buy it, the analyst predicted. He raised his price target on the name to $33 from $25 and kept a Buy rating on the stock. Qlik could be sold to either a strategic or private equity buyer, according to RBC Capital analyst Matthew Hedberg. Buying Qlik could "make a lot of sense" for technology product vendors such as IBM (IBM), Oracle (ORCL), or HP Enterprise (HPE), the analyst believes. Private equity firms could also look to buy Qlik, since its margins have room to increase, according to Hedberg. After analyzing past acquisitions in the business intelligence space, Hedberg indicates that he believes that Qlik could be acquired for $33-$45 per share. He raised his price target on the name to $35 from $30 and kept an Outperform rating on the stock.

WHAT'S NOTABLE: On March 3, hedge fund Elliott Management disclosed that it had obtained an 8.8% stake in Qlik. Indicating that it may push Qlik to sell itself, Elliott said that the company could be acquired for 40%+ more than its enterprise value at the time. PRICE ACTION: In early trading, Qlik rose 7.5% to $28.70.

Disclosure: None.

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