Boingo Unlikely to Be Sold Unless Bid Tops Current Share Price, Say Analysts

Boingo Wireless confirms it has received takeover offers.
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Shares of Boingo Wireless  (WIFI) - Get Report soared Tuesday even after analysts said the mobile Internet service provider is unlikely to be sold unless the offer is at a much higher level than the stock’s recent price range.

Bloomberg reported last month that Boingo Wireless was considering a sale. The company confirmed in its earnings report Monday that it “has received multiple inquiries regarding a potential strategic transaction.” Boingo Wireless said its board was mulling the bids so it said it would suspend earnings guidance.

Boingo implemented a restructuring plan in December, including an elimination of 80 jobs, or 16% of its workforce. Its share price has plummeted 43% in the last year.

As for the analysts, Kyle McNealy of Jeffries wrote in a report that Boingo Wireless has no “urgency for a sale” unless the offer comes at a “considerably higher price than the current trading range."

Boingo Wireless has “a valuable collection of assets that would be appealing to a variety of buyers,” he said. McNealy has a buy rating on the stock.

William Blair analysts made the same points. Boingo “has an attractive long-term pipeline,” and its total addressable market “is large and substantially underpenetrated,” they wrote in a report.

The company’s revenue and adjusted Ebitda came in below analysts’ estimates for the fourth quarter “largely due to declines in [distributed antenna system] revenue,” the analysts at William Blair said. The analysts have an outperform rating on Boingo shares.

At last check, the stock traded at $14.61, up 22.73%.