Baird Says Reported Shutterfly Offer Is 15% Too Low

Shutterfly (NASDAQ: SFLY) is unlikely to consider a reported $2 billion bid from private equity firm Hellman & Friedman, according to an analyst.

Other private investors are also interested in the Internet-based photo services company, according to a report Wednesday by Bloomberg and others, which said a deal could be announced early next month.

Shutterfly, with a market capitalization of about $1.89 billion, would fetch around $52 a share in the reported offer, which the company hasn't confirmed.

Robert Baird's Colin Sebastian rates the shares at Buy with a $55 target, and said Shutterfly would be likely to consider offers "closer to $60 a share," or about 15 percent higher than the reported bid.

Assuming Shutterfly is seeking offers, Sebastian said a private equity buyer or possible management buyout would be more logical than a so-called strategic buyer.

Sebastian said a public company's constraints on funding long-term investments in technology make a going-private scenario desirable to Shutterfly management.

Shutterfly closed Wednesday at $50.47 a share, up 1.26 percent.