Energizer Holdings is the most logical buyer for Spectrum Brands’ battery unit, an analyst said Thursday, sending Energizer’s stock up more than 5 percent.
Deutsche Bank raised its recommendation on Town and Country-based Energizer to “buy” from “hold.” Energizer stock closed at $51.05 a share Thursday, its highest in more than six months.
In a research note, Deutsche analyst Faiza Alwy said Energizer is the most logical, strategic buyer for Spectrum Brands’ battery business, and antitrust issues could be overcome given easily accessible battery capacity in Asia.
Wednesday, Madison, Wis.-based Spectrum Brands said it was looking to sell its battery and cookware business to reduce debt and focus on higher margin brands. Spectrum makes the Rayovac battery brand and owns VARTA Consumer Battery, a leading European battery brand.
“We have received multiple inquiries from prospective buyers and are in active discussions with several,” Andreas Rouvé, CEO of Spectrum Brands Holdings, said in an announcement Wednesday. “Given their attractiveness and upside potential, we believe these businesses can have accelerated success in the hands of new owners.”
An Energizer spokeswoman said the company had no comment.
The two companies briefly tangled in court a year ago. Energizer sued Spectrum in December 2016, alleging Rayovac packaging was being changed to mimic Energizer branding. But the suit was settled after little more than a month .
An acquisition of Rayovac by another of the market leaders for consumer batteries would leave just two companies dominating the space: Energizer and Duracell.
Both Energizer and Duracell have made their own moves in recent years to separate the slower-growing battery business from other segments. In 2015, Energizer spun off its consumer products division that makes razors, sunscreen and feminine care products into Edgewell Personal Care, based in Chesterfield. Warren Buffett’s Berkshire Hathaway finalized its purchase of Duracell from Procter & Gamble in 2016.
Jacob Barker of the Post-Dispatch and Reuters contributed to this report.