Wynn’s Stock Soars After Word of Sale; Buyer’s Dips

Wynn’s International Inc.’s shares surged Wednesday, a day after Cleveland conglomerate Parker Hannifin Corp. said it agreed to buy the Orange-based company at a significant premium.

But shares of the conglomerate, Parker Hannifin Corp., headed in the opposite direction.

Wynn’s stock climbed more than 69%, or $9.25 a share, to $22.63, after the company agreed to a $23-a-share buyout offer.

Parker Hannifin’s stock dropped $2.56, or 6%, to $37.94. At one point during the session, the shares traded as low as $35. Both stocks trade on the New York Stock Exchange.

Investors and some analysts are apparently worried about the company’s exposure to cyclical automotive and truck markets through the acquisition of Wynn’s, which supplies automotive gaskets, sealing products and specialty chemicals.

In research notes prepared before Parker Hannifin’s conference call Wednesday morning, Bear Stearns analyst John Inch said the outlook for Wynn’s end markets is difficult given the environment of higher interest rates, declining auto sales and heavy-truck orders.

The analyst said Parker Hannifin will likely divest itself of Wynn’s oil division but “risk surrounds the potential timing and price to be realized.”

Legg Mason Wood Walker Inc. analyst Barry B. Bannister repeated his strong buy rating on Parker Hannifin. Citing the relatively small slice of revenue Wynn’s will add to Parker Hannifin’s $6-billion top line, Bannister said the acquisition shouldn’t significantly affect Parker Hannifin’s cyclicality.