Why P.F. Chang's Shares Surged

Matt Koppenheffer, The Motley Fool

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of restaurant operator P.F. Chang's China Bistro (NAS: PFCB) were getting a big boost today, surging as much as 30% after the company agreed to be taken private.

So what: It's earnings season and P.F. Chang's did report earnings today, but nobody really cares all that much about the company's first-quarter results right now. The big news is that the company signed an agreement to be sold to private equity firm Centerbridge Partners for $1.1 billion, or $51.50 per share.

Now what: No doubt some public shareholders who were excited about the long-term prospects of P.F. Chang's will be disappointed that the company is on its way to being taken private. However, the price that Centerbridge is paying looks like a pretty good one, valuing the company at 33 times expected 2012 earnings and 27 times 2013 estimates. The $51.50 price tag is a 30% premium to the average stock price over the 30 days ending April 30.

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