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Why At Home Group Stock Rocketed Higher Today

By Jon Quast - May 6, 2021 at 11:36AM

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The company is being acquired by a private equity firm.

What happened

Home decor retailer At Home Group (HOME) is getting acquired by private equity firm Hellman & Friedman, according to an official press release from the company. The buyout price is $36 per share, a healthy premium to where the stock traded yesterday. Because of this, At Home stock rocketed 16% higher today to trade around its buyout price.

So what

The acquisition caps off a wild ride for shareholders over the past 14 months. In March 2020, At Home stock cratered to just around $2 per share, as investors assumed the COVID-19 pandemic would decimate this brick-and-mortar retail business. However, quite the opposite happened -- stuck-at-home consumers were interested in updating their livings spaces and At Home was a beneficiary. Net sales soared 27% during the company's fiscal 2021.

A red rocket ship prepares to fly over a rising bar chart.

Image source: Getty Images.

At Home management is excited to be acquired by Hellman & Friedman and enter the next chapter of the company's story. Indeed, At Home CEO Lee Bird said that, in Hellman & Friedman, the company has found "the ideal partner to advance our At Home 2.0 long term strategy."

Now what

From Bird's language, it doesn't sound like investors should hold out hope for a higher bid. It looks like both At Home and Hellman & Friedman are happy with the arrangement. And this doesn't seem like the kind of deal that would be denied for regulatory concerns. For these reasons, shareholders shouldn't expect At Home stock to beat the market average between now and the closing of the acquisition. Therefore, it's probably in shareholders' best interests to start looking for better stock opportunities.

Jon Quast has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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