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Perion Network Ltd. Message Board

  • me_gtc me_gtc Jul 12, 2013 11:19 PM Flag

    Israeli Market Rumors...

    are sometimes exactly correct! I owned another Israeli stock, Shamir Optical, trading on Nasdaq as SHMR before it was bought out. It was the subject of accurate merger rumors on an Israeli website just as merger negotiations were occurring, though the actual announcement of the deal took 4 more months.

    Finally had the chance to go back and verify this. Documentation can be found on the SEC edgar website, under ticker SHMR, the SC13E31A filing dated 2011-03-24, page 23:

    "On June 16, 2010, an Israeli journal named the “Calcalist” reported on its website that Essilor and Shamir were rumored to be in discussions about a possible acquisition. A blog in the United States named the “Eye Over Heard” also reported the story. On the same day, Mr. Netzer, Mr. Sagnières and their respective advisors discussed the market rumors and the status of Essilor’s due diligence. Given the confidentiality obligations in respect of the parties’ discussions, the significant conditions to a potential transaction as provided in the parties’ non-binding term sheet and the absence of any definitive agreement in respect of the potential transaction, and following the analysis by Shamir of the applicable regulatory requirements, the parties determined to continue their respective policies of not responding to market rumors."

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    • All of you who say "it has been a month, so this merger won't happen" are kidding yourselves. Mergers usually take a long time. The takeover I described below took 4 months from published Israeli market rumors until merger announcement. Another example, I just had a holding in PWER taken over, where the SEC filing said negotiations with ABB started in June 2011, but the takeover wasn't announced in April 2013.

      However, I am very sceptical about one part of the story for a merger, the alleged desire for Conduit to take over PERI so they can reverse merger into a public company. Reverse mergers have a lousy reputation, had even before the blowup of dozens of Chinese reverse mergers a few years ago. Conduit, with a $1+ billion valuation based on investments by very sophisticated investors, undoubtedly has been told this. So why would they want to do a reverse merger? The higher valuation they would receive through an IPO with investor confidence in their numbers would FAR outweigh the fee they'd have to pay for the investment banking! My opinion is that if Conduit takes over PERI, the merged firm will be a private company until Conduit does an IPO.

      • 1 Reply to me_gtc
      • Conduit, is not planning on merging the entire company into PERI. They simply want to spin off the desktop toolbar business and merge only that business into PERI and then take the remaining part of the company public via regular channels. Why merge the toolbar business into PERI? If you read previous interviews with the CEO of Conduit online, he does not seem to think the desktop toolbar business is a good business to be anymore (any business tied to desktop usage is doomed to slow down as mobile accelerates), nor is it exciting enough for an IPO. So essentially he wants to dump the toolbar business on PERI and take the mobile business of Conduit public in the regular way.

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