Looks like the sale closes in 60 to 90 days. If you had sold at today's high, you may have been ahead of the game in terms of available ROI, unless 3% annualized appeals to you. Keep in mind, however, that the sale may not close until early 2015. So, be aware of your personal tax situation and figure out in which year you prefer to realize your gain (or loss). That is, if the closing does take that long.
Note the class action lawsuits announced today. Whenever there's a transaction, you can be confident that the legal parasites will descend. The company was going to get sued no matter what they did. But, you can also be confident that the parasites will walk away with nothing. The BOD played this pretty well, I believe. Nothing was left on the table, or not much.
Sunday night... presidential election results do not bode well for the Brazilian economy & stock market. Don't expect the acquisition to be sweetened. The risk premium in Brazil just moved up and will likely moderate any more juice being squeezed by CQB. Those who sold the election risk should be on the right side of the trade.
There should be an announcement forthcoming about the deal. I just read an article in a Brazilian publication that said the transaction is happening at $14.50, which seems plausible, but I have no idea if they have real information, or if they've misinterpreted what's available. It was in Portuguese so no point in trying to paste it here. Jjnotes, if the deal price is truly $14.50, the stock will trade below that. How far below depends on the closing date. Arbitrage firms will get involved and purchase shares on the open market at a discount and make a profit by holding till the deal closes and pocketing the difference. It's basically a present value calculation at whatever rate the market deems appropriate. For example, if the shares trade at $14.35 and the closing takes 30 dsys, arbitrage makes an approximate ROI of 12% annualized. Many investors may be interested in selling at a small discount so that they can move on. If you hold the shares till closing, then at that time your brokerage will handle everything and your shares will magically turn into cash one night. No idea how long closing will take, but shouldn't be over 60 days if that.
Well done, larryfrito! That's a great trade. Best of luck. I've enjoyed the banter.
it should trade for a bit around the 14.50 give or take. and they should announce the date that you will be traded out (cashed out). should be fairly straight ahead.
slew, do you think differently?
I have a question for you guys. If the deal closes this weekend / Monday for 14.5, then what would the exact process be for them purchasing all shares? Is it immediate? Thanks for your insight, I have never been a holder when an actual all cash deal goes down that will take a company private.
ya the option trading was dead and the spreads were wide. seems like as soon as the original news hit, everyone just sat and waited. and as it looks now people did the correct thing. if the deal closes at 14.50 i hope to get 3.50 for my $11 calls. i bought them at 35 cents so it will be a great win. i hope for no crazyness....just make the deal and done.....good luck....its been fun chatting with you and you have been a great source of info.... thx
Just read that, too, larryfrito. Seems to me that $14.50 is guaranteed and a very small chance of a few pennies more. If so, then it's the (patient) hogs that get the most from this deal, as it's higher than the stock has traded during all of the tug of war, albeit by very little. I'm fine with the outcome, though in hindsight would have done well to add at the dips below $12.75 last week. I did try to pick up some $13 options and couldn't get an execution at a price that felt appropriate at risk adjusted.
O Estado de S. Paulo columnist Sonia Racy reported that a deal with Cultrale/Safra was imminent. The columnist cited sources involved in the ongoing negotiations that weren't specifically identified.
Chiquita said that it will not update the market with any new information unless the company's Board has reached a final decision.
tincupinhand, what race is too close to call? The proxy vote is over and the merger is off. The only thing left is for CQB to negotiate with Cutrale-Safra, which is happening this weekend. By Monday at latest, they will have either agreed on $14.50, some price slightly above $14.50, or the offer will expire and CQB will continue to operate independently. If you wanted to sell your shares before knowing the outcome of those final negotiations, you would have had to sell today while the market was still open.
This all is starting to take on the perspective that an old adage tells us: pigs get fed...hogs get slaughtered
Oddly the elections in Brazil this Sunday are likely the linch pin. A win by Neves puts wind in the sails of the economic sector and could justify greater confidence in the bid for CQB. The race is too close to call so I'm taking my chips off the table. It was a great run in bananas over the last couple years. What the hell do I buy now?
The BOD risks being sued no matter what they do. If they reject the $14.50, then Wynnefield and others like them will undoubtedly claim that fiduciary responsibility had been abandoned. At the same time, since the company already refused $14.50 and there are a large number of shareholders who do not feel that the C-F offer is adequate, they also could claim that the BOD did not act properly. If you look at a price chart for the past 5 years, you will surmise that there are plenty of shareholder who paid more than $14.50 per share and may want to wait for the company to earn its way above that. Anyway, I do expect a deal will be struck by the end of the weekend, at either $14.50 or not much more than that. Interestingly, the stock never did get quite to $14.50 during all of the gyrations over the past months. It came close, though, and I think a lot of people are surprised (including me) that a better offer never materialized.
If cqb rejects the 14.50 and simply let's them walk it may cause a fair amount of risk around fiduciary responcability. Not sure if that would be the move over .50 cents a share. Of course I have a horse in the race so I am not fair minded. JUST CLOSE A DEAL ! And let's move on......lol
Well, part of it depends on whether the Brazil Nuts left anything off the table with their offer. Increasing when they did was a desperation move, because a lot of votes were already cast and they would have improved their chances with the same offer a day earlier (not that it matters now, because they did successfully block the merger). It does suggest that they really, really, really didn't want to pay this much.
CQB has rejected $14.50 and also stated that there was no guarantee of closing a deal. The current offer expires Sunday. Keep in mind that even Glass Lewis, who outright rejected the merger (twice) did not endorse the Cutrale-Safra offer. They went so far as to say that CQB might be better off going it alone. So, there is some leverage on the CQB end in that respect.
CQB could, if they wanted, tell the Brazilians that they don't want to sell at $14.50 and if they don't offer $15, they will move ahead solo. The offer expires, Wynnefield goes ballistic, and so on. At that juncture, there is nothing that stops CQB from entering a new deal with Fyffes that is substantially the same as the last one, but with some kind of sweetener that sways more CQB votes. To preclude this scenario, Cutrale-Safra throw down a little more pocket change and sew things up. Remember, CQB does not have to pay the break up fee unless they do a deal with someone else within 9 months.
My personal guess is that a deal will be announced at $14.50 on Monday, or over the weekend. Kind of irks me, though, and I hope CQB has a means for turning the screws to get minimally fair value.
Ha! I'm pretty sure it was a close vote. The Fyffes deal is off (for now). But that doesn't mean that CQB is being sold to the Brazilians. Probably, though.
Correction: Credit Suisse is advising CQB. I think Goldman Sachs was only responsible for the financial analysis. Anyway, it appears that there will be no press release this evening from Chiquita. We'll find out in the morning how it all worked out.