I have to agree with you. Another major point to consider is the fact that Empire has applied for a 20% rate hike and as UCU stated in the merger proposal all of the savings from reducing the workforce by 40% and selling off the property not needed after the merger is completed then I would have to surmise that UCU would not get much or any of the rate request if the merger is completed. Ucu driving force is shareholder value and it just doesn't appear that paying half again for a company just doesn't make sense to their sacred shareholder value.
Hope that you all saw the release at 6:55PM that the MO Commission approved the merger with UCU subject to hearings. I believe that it will go forward with Ark coming in line shortly. I am also sorry if Matt is losing his job, but consolidation within the industry is necessary and years have been spent in the protected environment that has lead to great inefficiencies. Making progress in delivering services in a " very competitive " future requires a lot of fat trimming- often initially too far but that will adjust in time. When UCU put the $ 26.00 collar in they knew then and there what the dilution would be as the number of shares are set at that point- any gain in stockprices from that point is a windfall to the EDE shareholders , but even bigger for the UCU shareholders. I hope we get at least $34 and that you live comfortably in retirement! Good Luck!
Matt, Its a little early here in Fla. so I can't really get your math; ie if the appreciation of UCU means they are paying $100 more -valid. How are they paying nearly half again or 350M more for a 600M acquisition. Is this fuzzy math or am I having a Senior moment? Please help!
When the merger was announced the price of Empire stock was in the $21 range. And UCU agreed to pay a 39% premium,to get the shareholders to vote positively on the merger, which put the price of the stock UCU would pay at $29.50 providing that UCU stock was priced between $22 and $26 dollars per share. However with their stock presently above $30 dollars they will have to pay $1.135 more per share more for every dollar above $26 dollars that UCU stock goes to. So Because of the offer Empire stock has gained in value from approximately $21 dollars to now if it merged and closed today to a price in the range of $34 dollars per share. So by my math the price has gained $13 dollars a share. By UCU's math they have stated that with the 39% premium they are going to pay $850 million dollars with $250 million being the 39% premium. That was with a $8.50 increase in value from $21 cdollars and now they would have to pay an additional $4.00 dollars per share to acquire the stock which figures out to be better than $100 million dollars more than they had originally stated. If the price of their stock continues to rise they will have to pay even more to close the deal. I hope this helps.
I do not loathe shareholder value. I have some friends at Empire and know a fair amount of what has went on with the merger. Empires management has bet the farm on the deal being consumated and if its not the shareholder value of Empire is going to tank big time. There are a lot of retirees who live on their Empire stock and they are going to take a big hit if it doesn't happen as well. UCU hasn't exactly been honest with their dealings with Empire employees in regards to what happens after the merger. Without loyal and dedicated employees management can't sustain shareholder value either. Ucu has announced that it is going to sell off all of the men an equipment in all their utilities and retain only the lines and power plants and substations. So with Empire they will have bought the company with 615 employees and by the time its all said and done they will have about 150 employees left of the original company. The sell also affects about 900 UCU employees that currently work for them as well so when you have 1300 employees that have absolutely no future with UCU they obviously are not going to be overly concerned with the financial welfare of UCU or their shareholder value. A company must give some thought to their employees to thrive and I personally think the executives of Empire or UCU could care less about their employees and its the employees who have did the actual work to make them successful. Sorry a bit winded, but its how I feel. Good stock hunting to all!!!!!!