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SUPERVALU Inc. Message Board

  • peaktickets peaktickets Mar 4, 2013 11:53 AM Flag

    Dilution is coming

    Wow, Cerberus and Supervalu are really sticking it too share holders now.

    They anounce an extension for another month. The share price suddenly moves to the mythical $4.00 mark.

    Now what? You have tendered share at $4.00 but you know that with 42% tendered and a 30% max purchase that at most only about 70% of your shares will be tendered. So now what? Sell on the open market for $4.00 or maybe more and cancel your tender? Why not?

    That's what Supervalu hopes for. Why? All shares that are tendered puts money in share holders pockets and reduces the share holders invested in SVU. If they can discourage shares from being tendered, and they will... It could cause new issues that will dilute the outstanding shares. This sucks for share holders but is good for Supervalu. New issues puts the money in Supervalu's pocket and not current investors. Cerberus/Symphony still get equity ownership, but Supervalu raises cash. They don't care about the dilution.

    I warned you of this weeks ago and was beginning to think I might possibly be wrong, but then not to my surprise....

    Boom! An extension and a surge to $4,00 Dilution is the solution amongst the confusion. I have peeked in every now and then and sadly, there has been very little meaningful conversation on this thread.

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SVU
4.35-0.22(-4.81%)Jun 24 4:05 PMEDT