Wells Fargo sees a 50% probability that a buyout happens.

Finish Line Inc. (FINL) shares gained over 2% premarket Friday, Sept. 29, after Wells Fargo analysts estimated the stock could be sold in the $14 to $16 range as part of a buyout from the U.K.'s largest sporting goods retailer, Sports Direct International (SDIPF) .

A Finish Line buyout makes sense for Sports Direct because it would offer instant penetration in U.S. markets plus additional leverage with key vendors, analysts said in a note Friday. Sports Direct has a history of buying "struggling businesses at cheap valuations," too.

As for Finish Line, a deal could result in "significant upside" of up to 35% for its stock. Shares closed Thursday at less than 4.5 times estimated Ebitda for fiscal 2018. The "lowest retail takeout we've seen in years" was Staples Inc., which was bought by Sycamore Partners for 5.5 times Ebitda earlier this month.

"We doubt FINL would sell for less than Staples, a company that hasn't comped positive in 10 years and operates in a tough office-supply-retail industry," analysts noted.

Wells Fargo raised their price target for Finish Line stock to $12 on a 50% probability that a deal happens. The previous $9 price target was in a "no deal" scenario.

Although neither company has confirmed deal negotiations, Finish Line shares spiked late Thursday on buyout chatter to close up over 3.5%. Since the start of the year, shares have lost about 38% of their value.

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