J.P. Morgan Comments On TYC / Schneider Merger

J.P. Morgan is commenting on the prospective merger between Tyco International Ltd. 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.