zlb
Member of DD Central
Posts: 1,422
Likes: 333
|
Buy outs
Dec 28, 2019 8:40:44 GMT
via mobile
Post by zlb on Dec 28, 2019 8:40:44 GMT
Anyone own Consort Medical? they are being bought out, after a crash in value. I'm being offered a buy out value by the purchaser that is less than what I could get if I sold (yesterday). It seems like a hold to me... but would the price be artificially inflated by the buy-out?
|
|
bigfoot12
Member of DD Central
Posts: 1,817
Likes: 816
|
Post by bigfoot12 on Dec 28, 2019 11:28:00 GMT
I don't own any, but the price seems to have been below the 1,010p offer price for over a year. For most of the last few months the price has been 700-800p. The price went a little above the offer price - perhaps a few traders were caught short, or maybe some hoped there would be a rival bid. If you hold out you might be forced to sell anyway.
Whether to sell now at a slight premium to the bid will depend on how commission charges will work for your account. Do you think that there will be a rival bidder? How will Brexit impact their cost base or sales?
|
|
zlb
Member of DD Central
Posts: 1,422
Likes: 333
|
Buy outs
Jan 5, 2020 20:48:46 GMT
via mobile
Post by zlb on Jan 5, 2020 20:48:46 GMT
I don't own any, but the price seems to have been below the 1,010p offer price for over a year. For most of the last few months the price has been 700-800p. The price went a little above the offer price - perhaps a few traders were caught short, or maybe some hoped there would be a rival bid. If you hold out you might be forced to sell anyway. Whether to sell now at a slight premium to the bid will depend on how commission charges will work for your account. Do you think that there will be a rival bidder? How will Brexit impact their cost base or sales? thanks. Didn't see your reply at first! So it's down to the factors such as brexit which affect all other things, it seems. I think I need to do more homework as to what the business is that is buying them. So I could be forced to sell even though the email said that if I don't respond to their invitation to buy my shares, that the default position would stay, which I presumed was that I'd have shares in the buyer.
|
|
zlb
Member of DD Central
Posts: 1,422
Likes: 333
|
Buy outs
Jan 5, 2020 20:55:19 GMT
via mobile
Post by zlb on Jan 5, 2020 20:55:19 GMT
Anyone own Consort Medical? they are being bought out, after a crash in value. I'm being offered a buy out value by the purchaser that is less than what I could get if I sold (yesterday). It seems like a hold to me... but would the price be artificially inflated by the buy-out? The Shakespeareian question you are asking (to hold or not to hold) is otherwise known as Risk Arbitrage. An exceedingly complex topic on which entire books could (and have) been written. Price behaviour after corporate actions are announced is an inherent part of Risk Arb. As for why trading above the price, could be a multitude of reasons. I don't know anything about Consort Medical, so my hunch would be as bigfoot12 suggests, i.e. that people are probably hoping for a better offer to come along before making their final decision (whether voluntary or forced). If you have a large enough holding and can't bring yourself to sell the lot, then perhaps at least you might consider skimming some of the cream whilst the going is good. Sell with regret as the old saying goes ! thanks. I don't have enough to warrant splitting sell/hold, but otherwise I would. I don't understand why their share price should dip so low (as @bigfoot references), and then spring back, presumably owing to the buy out. I don't feel so bad now illustrated as difficult question. More reading I suppose.
|
|
zlb
Member of DD Central
Posts: 1,422
Likes: 333
|
Buy outs
Jan 7, 2020 23:22:27 GMT
via mobile
Post by zlb on Jan 7, 2020 23:22:27 GMT
Thank you @wallstreet ... amazing, and hope others can learn. I've had a look.
My niaive thought was that one could end up with shares in Recipharm (if (now I understand) the 90% weren't reached. If that would never happen in a buy out, then that's handy to understand (or not in my case)
. (I'd agree, I'd expect 88% to be close enough to estimate that 90% could be reached).
I've been looking at HL, lots of documents in news eg form 8.3 - so the companies listed there would likely sell back? This is for learning now - the platform I use set the deadline as 6th - I see now, thought it was 9th.
|
|
zlb
Member of DD Central
Posts: 1,422
Likes: 333
|
Post by zlb on Jan 8, 2020 12:31:56 GMT
My niaive thought was that one could end up with shares in Recipharm Not naïve at all, its a reasonable line of thought, and indeed there are plenty of examples of takeovers where this has been the case for shareholders. But ultimately its up to the buyer as to what they want to put on the table, and in this case I guess Recipharm thought they could get away with cash-only. Bit of a shame when that happens really, I always like to see options given to shareholders rather than "my way or the highway". thanks. It's now at 1040, with the cash offer at 1010. I suppose it's not a huge price difference, but I imagine must have been created by a large number of purchasers. I split in the end, sold and hold.
|
|
