Street Softens on Size of Nortek Bump

While the proposed $40-per-share takeout of Nortek Inc. by Kelso & Co. has weakened in the eyes of the Street lately, some investors maintain the offer grievously undervalues the building products manufacturer. Since Kelso put its $1.3 billion bid for Nortek in writing on April 12, Nortek’s stock had remained, until last week, at least $1.10 per share above the offer and even hit as high as $43.87 per share on April 19. Last Tuesday, though, Nortek stock traded as low as $41 a share. The stock’s low the following day was $41.50 a share, but as one arb, who is looking but not buying, noted on Tuesday, “It’s getting cheaper every day.” At press time last Thursday, Providence, R.I.-based Nortek’s stock closed at $41.20 per share, having hit as low as $40.90 on the day.