Greenbriar isn't likely going to walk away from this. They should either match or more likely beat with a higher offer. Since a new bidder showed up so fast, other bidders may come forward. Before the original announcement, I expected the buyout price to be $23 and it's worth that and more.
Another thought comes to mind as well ... THE LEAK. Trading on insider info, and its impact on rushing the deal.
Obviously, news of the pending offer got out in mid-Feb. Volume spiked. The shares started running. I suspect that wound up having the effect of a rushed effort to get a decision made and out to the mkt. There wasn't ample time for all interested parties to thoroughly do their work to determine value. Could be that mgt just went ahead and aligned with someone, anyone, to get the news out ... knowing they could then run a fair and open auction afterwards? Given ... Even if they did commit their shares to Greenbriar, they aren't locked. They have legal duties to shareholders to accept the best offer.
This could turn into a circus. The move is happening. Sales are ramping. New contracts are expected soon. A bidding war for the company is on. And the SEC has been alerted to the trading on insider information. I suspect the SEC will walk into this situation soon, which will truly turn this into a EDAC three ring circus.
I agree with your assessment. However, Greenbrier has this agreement with EDAC's insiders that could make other interested parties hesitate.
One can only concluded that EDAC's management and board of directors have not performed their duty to work for shareholders' interests ~ they should have invited more bids for EDAC instead of "lining-up" their pockets.
I've reservation about the CEO before and remember you had mentioned highly of him. Well, I guess everyone was wrong about him .... There is very few CEOs out there who will put shareholders' interest fitsr - a sad commentary about our corporate leaders.
Your name says it all. The new buyer has assessed the situation and has concluded there is value there that is worth more than the prior offer. The agreement between Greenbrier and Pagano will not scare off a buyer. Only a lack of money will. And Pagano and Greenbrier know the inside potential than we can only guess. The one with deeper pockets and can figure out a higher value will win. The biggest problem as I see it is we the long term individual shareholder will lose because we will lose all the future appreciation that will accru to the buyers when they own it all and we are on the outside watching them make the money that rightfully belongs to us. And don't forget, we will have to pay taxes on the gains we have to date if the stock is owned in a taxable account.
Greenbrier's $17.75 offer was put in as a low-ball offering with the idea to try to steal the stock at a price they estimate is worth more. It isn't their final offer. I would guess they estimated going as much as 50% higher,IF THEY NEED TO If that is true, they would pay as high as $26.62 which means they really believe EDAC stock is $40 to $50 or more in a year or so. Thats not a typo---$50 or more in a year, otherwise they wouldn't be wasting their time in trying to take EDAC private.
Patience-time is on our side.