Franchise Group (NASDAQ:FRG) may not be all that recognizable, but its properties definitely are. Owners of Pet Supplies Plus, American Freight furniture, and several others, it’s recently received a takeover proposal that values Franchise Group significantly above its current levels. Investors reacted with explosive fervor, sending shares of Franchise Group up over 14% in Monday afternoon’s trading.
The takeover proposal—which is non-binding, at last report—calls for an unnamed bidder to shell out $30 a share for all outstanding common stock. The Franchise Group board is currently considering the offer, with no confirmation that they’ll actually go for this. The deal represents roughly a $5 premium over current share prices as of this writing.
Interestingly, the deal comes at a fortuitous time for Franchise Group. Back in January, Franchise Group was considering going private after a deal for Kohl’s (NASDAQ:KSS) fell through. Buying Franchise Group will give this unnamed investor access to a wide range of properties in several different industries, from vitamins to home furniture to pet supplies.
When taking a look at hedge fund activity, it’s no surprise that a buyout offer has emerged. Current sentiment among hedge funds is Very Positive, as they added 400,600 shares to their positions in the last quarter, reversing a slight decline and building on a gain from two quarters prior.
