Citi Comments On SB Share Equity Offering

After the close Monday, Safe Bulkers, Inc. (NYSE: SB) launched a five million share equity offering, “which at Monday's closing price would raise approximately $44 million net of transaction fees and excluding a 0.75 million share over-allotment option,” Citi reports.

“Including the over-allotment option, we would expect total net proceeds of approximately $50 million,” Citi writes.

“We believe traditional EV/EBITDA valuations provide the best method to value the profit generation of dry bulk assets. Our $10 price target is based on a 7.9x multiple of our 2011 EBITDA estimate. We are using an above-average multiple given Safe Bulkers' stable performance through the downturn and eleventh straight quarter of paying a cash dividend since its 2008 IPO.”

Safe Bulkers closed Monday at $9.26.