Benchmark ‘would not be surprised’ if DOJ files suit against Live Nation

Benchmark analyst Matthew Harrigan notes that Live Nation was trading off by about 7% pre-market in reaction to The Wall Street Journal report that the Department of Justice could initiate an antitrust suit aimed at Ticketmaster as early as next month, stating that “the major new element” of the report was the potential timing. While the firm tells investors it “frankly would not be surprised if a DOJ suit did materialize, especially in a political year when either party is apt to posture to attract younger voters,” the firm added that Live Nation did confirm with the WSJ that there is no source for reporting that a DOJ action could “unravel” the 2010 settlement for Live Nation’s acquisition of Ticketmaster. The firm, which contends that Live Nation management under CEO Michael Rapino has been “meticulous in complying with the merger consent decree,” estimates the value of Ticketmaster at $56 within its $130 price target on Live Nation shares, prior to any “dyssynergies,” implying fair stock value is $74 even sans that business. The firm keeps a Buy rating on Live Nation shares.