There is a 50% chance that a Buffalo Wild Wings buyout will happen (BWLD)

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A takeover by Buffalo Wild Wings has only a 50% chance of succeeding, estimates Dennis Geiger, analyst at UBS.
The wing chain showed good fundamentals after changing the price of its wings.
View the company’s stock price here.

Although Wall Street has welcomed the possibility of a Buffalo Wild Wings buyout – gobbling up its shares following a report that Roark Capital has submitted a purchase offer on the chicken wing franchise – the chances of a buyout are only 50%, said a UBS analyst.

Analyst Dennis Geiger believes that while there is a strong case for a buyout, the company’s brand “still remains strong and differentiated in the casual dining sector.” He is optimistic that the fender chain alone could improve its original performance.

Buffalo Wild Wings is showing signs of turning around from an otherwise lackluster performance, he said. Roark Capital’s offer came just ahead of the company’s better-than-expected third-quarter results, which showed it was able to control costs, Geiger said.

The company said the price of its chicken wings was “historically high” and has since reduced its popular half-price wing promotion to address this concern. Geiger said wing prices are now about 20% below their recent highs, which could give the company greater sales momentum in 2018 as lower prices and cost savings take hold. feel.

This would give the company some leverage to manage a takeover bid.

“We believe the company could either reject the offer or ask for a higher offer,” he said. It has previously been reported that there could be more than one potential bidder for the company, according to a report from Street Insider.

Geiger raised its base price target from $140 to $148, based on company fundamentals and a potential takeaway valuation.

Buffalo Wild Wings stock is trading at $145.85 per share, down 3.89% this year.