Shares of Santa Ana-based Corinthian Colleges Inc. shot up Tuesday on buyout speculation after an investment by Washington Post Co.
Washington Post, which owns the paper and operates post secondary schools through its Kaplan Higher Education unit, recently disclosed it took an 8.1% stake in Corinthian.
“We believe Washington Post will use this holding to enter talks with Corinthian,” wrote Deutsche Bank analyst Paul Ginocchio in a note.
Corinthian’s shares closed up nearly 14% on Tuesday with a market value of $750 million.
In a filing with the U.S. Securities and Exchange Commission, Washington, D.C.-based Washington Post said that it acquired $60 million worth of shares in the operator of for-profit schools because “such purchases represented an attractive investment opportunity.”
Washington Post spokesman jay Morse responded to the buyout speculation, telling Reuters that “it’s an investment” and declining to comment further.
The company’s Kaplan Higher Education unit serves more than 75,00 students at about 70 schools in the U.S. and Europe.
Corinthian operates more than 100 schools nationwide and in Canada that offer degrees and certificates in healthcare, business, technology and other areas.
The company has had more than a two-year slump with falling enrollment, lower profits and setbacks in a program designed to get more students to its schools.
Analysts in the past have said the company’s “countercyclical” nature could spur gains as the economy cools.
Historically, the biggest jumps in for-profit enrollment come amid economic slowdowns, analysts say. The biggest drops followed strong economic growth, as seen in the past few years.
