ZIM could be going private. Is now the time to buy the stock?
Shares of ZIM Integrated Shipping Services (ZIM -3.83%) were up big this week before retreating. The stock had gained nearly 15% as trading began on Monday, but it is now up just 5.5% as of 2:33 p.m. on Friday. The S&P 500 has gained 1% and the Nasdaq-100 has gained 0.5%.
A report revealed that ZIM CEO Eli Glickman and a group of investors are seeking to take the Israeli shipping company private.
ZIM could be going private
The Israeli business publication Cacalist reported that Glickman, five other executives from the company, and a businessman named Ramy Unger are putting a deal together to take the company private. The group’s offer values the company at roughly $2.4 billion, which would equate to $20 per share — a significant upside from Friday’s close of $15.50 a share. The report also revealed that Glickman and the investors will merge the company with Rea Shipping, owned by Unger.
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The news broke before this week’s trading began, and the stock immediately spiked. However, new details have yet to be revealed, and the stock has steadily declined since, though it’s still up about 6% from Friday’s close.
UN debates net-zero shipping
This comes as the United Nations debates the Net Zero Framework for reducing global shipping emissions to net zero by 2050. The United States has rejected the proposal, and the Department of Energy released a statement calling the framework a “global carbon tax” that would harm American consumers and the global shipping industry.
Investors shouldn’t take the acquisition as guaranteed
There’s a lot more to learn about a possible deal, and investors should know that it’s possible that the deal will fall through. Still, with an enterprise value of more than twice its current market cap and a price-to-earnings ratio (P/E) of just 0.87, ZIM seems like a solid pick.
Johnny Rice has no position in any of the stocks mentioned. The Motley Fool recommends Zim Integrated Shipping Services. The Motley Fool has a disclosure policy.
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