Stifel Nicolaus Sees Potential Change of Control at American Italian Pasta (PLB)

Stifel Nicolaus upgrades American Italian Pasta Company (NYSE: PLB) from Hold to Buy with a $12 price target, although they say major risks remain. The firm estimates that American Italian Pasta generated EBITDA in a range of $60 million to $65 million for the company's completed FY06 ended September 2006. The firm also believes operations have been greatly improved under the leadership of the management consulting / workout firm Alvarez & Marsal.

Analyst George I. Askew said, "We believe that a potential change of control could occur at American Italian Pasta over the intermediate term once the company re-files financial statements with the SEC. Importantly, affiliates of private equity group Sun Capital are believed to own over 13% of the company's shares and the short interest in the company's stock is estimated at 35% to 40% of shares outstanding.