01:54 PM EDT, 07/23/2024 (MT Newswires) -- Fairfax is acquiring Sleep Country for $35 a share. Sleep Country also reports second quarter results on August 12, after market close.

National Bank's Vishal Shreedhar believes the takeout price is reasonable reflecting Sleep Country's strong market share, solid returns on capital albeit cyclical, and ongoing market uncertainty. He expects second quarter earnings per share to be flattish, reflecting higher SG&A expenditure and higher interest expense, mostly offset by positive same store sales growth, higher gross margin, new store openings in the last 12 months, contribution from Casper acquisition and share repurchases in the last 12 months.

"Our review of industry indicators suggests that the operating environment is sequentially improving, albeit with volatile trends."

Moving to Tender rating; price target is $35 from $30.

Price: 34.79, Change: +0.12, Percent Change: +0.35