The shares of Harley-Davidson were up 15 percent during morning trading this Friday. The spike is said to be motivated by talks of a potential buyout. Traders are passing around rumors that the motorcycle producer may be selling itself to a private equity. KKR & Co. is said to be the interested party in this regard. Also, could the company make a move on snowmobiles?
Harley-Davidson bought by KKR?
This report stems mostly from The Fly, which has sourced a number of social media posts and rumors about the purchase. KKR & Co. LP is a U.S.-based private equity company that operates in a number of countries around the world. Headquartered in New York, it acquires and oversees investment equity funds while specializing in leverage takeovers.
While the news can only be viewed as speculative right now, numerous outlets have reported on the ordeal more matter-of-factly. When asked for comment, KKR spokesperson Cara Kleiman responded by saying that the equity buyer does not entertain rumors and speculation.
However, Harley-Davidson could have an eye out for it own purchases. Looking to cover the riding off season, the company may want to purchase Arctic Cat, Inc. The company has a product that is the most ideal winter plaything and could moisten up Harley-Davidson’s dry season. Seeking-Alpha suggests that the open-roader firm should consider making the popular snowbikes of Arctic Cat its own.
Harley Snowmobiles this winter?
The cash and cash equivalent account of Harley-Davidson stood at $700m at the last quarter earnings report. Travis Brown says that the company should make a play for Arctic Cat, Inc. with the funds.
The two firms are moving in different directions globally but could complete wach other very well, according to Brown. Harley-Davidson is gettting massive responses lately and was among the stocks that blew up during the June’s Brexit ordeal. In the wake of June 24, HOD stock traded at a volume over 4.5 million. That’s more trading than the company usually get in a month, around twice as much.
Arctic Cat, Inc., on the other hand, isn’t doing so well. Dividends will have to paid from the company’s cash reserves this time around. Reports show that the firm had a negative FCF of more than $18 million. Though it managed to keep just over $17 million in the bank, Arctic has had better financial years.
The trend for Arctic could and is likely to continue. It has missed estimates for the whole year to-date and has lost a significant amount of confidence. Most the same period’s revenue gains were also below expert standards too.
New products are in the works for Arctic though. It’s snowmobile business is an ideal catch and will likely grow more popular with the release of it SVX 450. A snowmobile unit is the perfect supplement for Harley-Davidson. The latter firm draws in an lower earnings in cold seasons for clear reasons.
While Harleys are pushed in the summer, an snow-bike arm can raise significant funds and grow the brand into a year-rounder rather than a summer trend.