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Investing.com -- Shares of AZEK, a home-decking provider, soared in premarket trading by as much as 21% following the announcement that Australian building-materials company James Hardie (NYSE:JHX) Industries has agreed to acquire the business. The deal, which includes cash and stock, values AZEK at approximately $8.75 billion.
On the other hand, shares of James Hardie saw a steep decline of 15% in Sydney trading after the deal was announced on Monday, erasing about A$2.9 billion from the company’s market value. This marked the steepest drop in the company’s stock in the past 10 months.
AZEK’s stock rose 18% to $48.91 at 5:35 a.m. in New York. Initially, the deal valued AZEK at approximately $56.88 per share, based on James Hardie’s closing price on Friday. However, after Monday’s drop in James Hardie’s stock, the deal’s value has decreased to about $52.48 per AZEK share.
If the 21% gain in premarket trading maintains, AZEK is poised for its most significant intraday rise since June 12, 2020.
Ketan Mamtora, an analyst at BMO Capital Markets, commented on the deal. He stated that the acquisition is "very good from an AZEK shareholder perspective" and added that he doesn’t foresee "any regulatory hurdles."
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