Why DigitalGlobe, Inc. Stock Popped Today

By Steve Symington Markets Fool.com

What happened

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Shares ofDigitalGlobe Inc.(NYSE: DGI) climbed 18.2% Friday following reports the satellite-image purveyor is in talks to be acquired.

So what

According to a report(may require subscription)from The Wall Street Journal this afternoon, which cited "people familiar with the matter," DigitalGlobe has fielded interest from a "number of possible buyers." But now, the sources say, the company is in "advanced talks" to sell itself to Canadian satellite company MacDonald Dettwiler & Associates.

Imagery from DigitalGlobe's various satellites. IMAGE SOURCE: DigitalGlobe.

Now what

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These talks donotguarantee a deal will come to fruition, and the exact terms between MacDonald Dettwiler and DigitalGlobe are unclear. But with DigitalGlobe's unaffected market capitalization sitting around $1.8 billion, industry watchers speculate the buyout could be worth as much as $2 billion to $3 billion.

In the meantime, DigitalGlobe is scheduled to report fourth-quarter 2016 results on Monday, Feb. 27, 2017. If an agreement isn't reached before then -- and given the magnitude of today's pop -- you can bet investors will be listening closely for any additional clarity on the situation at that time.

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Steve Symington has no position in any stocks mentioned. The Motley Fool recommends DigitalGlobe. The Motley Fool has a disclosure policy.