James Hardie To Acquire AZEK In $8.8B Deal, Stock Nosedives: Analysts Divided While Retail Sentiment Hits A Nadir

Shares of James Hardie Industries Plc. (JHX) fell by more than 17% on Monday after the company announced that it would acquire U.S.-based building products maker AZEK Company Inc. (AZEK).

James Hardie will acquire AZEK in a $8.75 billion cash and stock deal – AZEK shareholders will receive $26.45 in cash and 1.034 shares of James Hardie for each share of AZEK.

This brings the total compensation per AZEK share to $56.88, which is at a premium of over 37% from the stock’s closing price on Friday.

Reacting to the news, AZEK’s stock rallied more than 17% on Monday, while James Hardie’s U.S.-listed equity fell more than 17% and extended losses in the after-hours session.

Just like retail investors, analysts were also divided on James Hardie’s acquisition of AZEK.

According to The Fly, analysts at Baird, Stephens, and Macquarie downgraded the James Hardie stock citing a potential dilution of the company’s returns and dragging its performance.

However, analysts at Truist, Morgan Stanley, and BMO Capital upgraded the stock and recommended investors to capitalize on the current weakness in James Hardie’s shares.

Retail sentiment on Stocktwits around James Hardie hit a nadir, hovering in the ‘extremely bearish’ (0/100) territory.

One user said they’re waiting for the stock to hit the $19-$21 levels.

On the other hand, retail sentiment around AZEK rose, entering the ‘neutral’ (46/100) territory from ‘extremely bearish’ a day ago.

One user recommends investors to “take the money and run.”

James Hardie’s stock has fallen more than 21% year-to-date, while AZEK’s stock is now up over 2% after Monday’s rally.

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