J.P. Morgan Comments On TYC / Schneider Merger

J.P. Morgan is commenting on the prospective merger between Tyco International Ltd. (NYSE: TYC) and Schneider.

“While we continue to believe that Tyco is an attractive value based on long term, late cycle fundamentals, maintaining discipline around valuation, the risk/reward at ~$53 (our standing PT) is no longer enough to keep it as our ‘top pick,'” J.P. Morgan writes. “As per our note from yesterday, we continue to believe that a deal looks possible given the heavy building management focus at Schneider (60% of TYC is non-resi related, with a massive installed base), and we see a sum of the parts value of ~$63 (a mere 15x our standing CY12 estimate of ~$4), see yesterday's note for details.”

Tyco International closed Tuesday at $52.33.