Southwest Airlines Co. is ripe for a leveraged buyout, with its high profit, unencumbered assets and low debt, one airline industry observer said Wednesday.
Analyst Roger King of CreditSights projected a possible market value of $15 billion, or $19 to $20 a share, for Southwest. Its shares, which have traded between $14.50 and $18.20 over the past year, closed up 46 cents Wednesday at $15.66.
In a report, Mr. King called a leveraged buyout of Dallas-based Southwest "a no-brainer in the current financial market. Airlines are in play all over the place."
Southwest "in particular has a multiyear fuel hedge portfolio, billions in unencumbered aircraft values, a significant [Boeing] 737 order book, excellent long-term operational and financial trends, industry tailwinds and upside potential as temptations," Mr. King said.
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Analyst Roger King of CreditSights projected a possible market value of $15 billion, or $19 to $20 a share, for Southwest. Its shares, which have traded between $14.50 and $18.20 over the past year, closed up 46 cents Wednesday at $15.66.
In a report, Mr. King called a leveraged buyout of Dallas-based Southwest "a no-brainer in the current financial market. Airlines are in play all over the place."
Southwest "in particular has a multiyear fuel hedge portfolio, billions in unencumbered aircraft values, a significant [Boeing] 737 order book, excellent long-term operational and financial trends, industry tailwinds and upside potential as temptations," Mr. King said.
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