Jefferies says buying Spirit likely not want Boeing holders want

Jefferies analyst Sheila Kahyaoglu derives a $39 sum-of-the-parts per share value for Spirit AeroSystems (SPR) after the Wall Street Journal reported the company has hired bankers to explore a potential sale to Boeing (BA). The stock in afternoon trading is up 15% to $32.88. The firm says the key questions are price and whether the deal would be accretive to Boeing. “Our take is there is a price for everything, but buying a troubled supplier likely does not generate the shareholder returns and deleveraging investors want,” the analyst tells investors in a research note. Jefferies estimates that given Boeing’s $16B of cash and the $10B needed to operate the company, the deal is likely to be funded with cash and debt versus equity. It believes the acquisition could be about 3.6% dilutive or $297M to its 2025 free cash flow estimate of $8.2B for Boeing.