09:50 AM EDT, 07/16/2024 (MT Newswires) -- Stifel GMP on Tuesday lowered its rating on the shares of Stelco Holdings ( STZHF ) to hold from buy while raising its price target to C$70.00 from C$47.00 after Cleveland-Cliffs (CLF) agreed to acquire the steelmaker for C$70.00 per share.

"Cleveland Cliffs' takeover offer of $70/sh for Stelco ( STZHF ) presents an 87% premium to STLC's closing price on Friday. We believe that shareholders should tender to the offer. Based on our estimates and definition of net debt, the EV/EBITDA transaction multiples are at 8.2x and 6.2x (post synergies) compared to our prior target multiple of 6.0x and the stock's valuation prior to the announcement at 4.5x. We acknowledge that there is modest regulatory risk, but we are of the view that this deal will be consummated. Lastly, management, the board and employees of STLC deserve a hat tip for the 2017 IPO price to CLF transaction price CAGR of 32%. We are increasing our target price to $70.00/sh from $47.00/sh and change our rating to HOLD from BUY," analyst Ian Gillies wrote.

(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)

Price: 65.10, Change: +0.10, Percent Change: +0.15