An intentional breach is not subject to a cap. GS left Myers with significant leverage with that language.
Unlike you, I haven't had any conversation with Myers execs. Should this deal fracture along financing, both parties will have arguments why the other has breached, but more likley, it will close, or the parties will come up with an agreeable number due Myers.
If MYE could sue for specific performance, I would have loaded the boat. But I think section 8.6 (f) of the merger agreement limits the damages against Goldman. What are you looking at that leads you to believe otherwise?
Nice that someone at Myers is providing you with material inside information on the 3rd quarter results during a blackout period. Care to share with us who at Myers is providing the information so we can call and get the same? (I find it interesting that you would ever post such a statement in a public forum where your identity can be traced)
I wouldn't expect Myers to say that GS could elect under the MAC/MAE - I'd rather hear GS's opinion.
GS's liability is more than the $35M; the $35M is just the deal fee. Myers could sue for specific performance or damages.
Ownership of Myers stock in excess of 5% should be listed in a Schedule 13D filed by GS and its affilates. Good luck finding it.
I spoke to MYE a few weeks agao and they indicated that there would be no "surpises" in the 3Q #'s and that there would be no MAC that goldman could hang their hat on. That being said, Goldman could still walk away by paying $35mm.
Goldman is the equity sponsor, Goldman is the debt underwriter, and Goldman already owns 10%+ of the stock. I find it hard to beleive that they would walk away, but stranger things have happened.
Does anyone know which part of Goldman owns 10% of the stock? risk arb group?
Two things will have a real impact on whether this deal will close - one, with the Fed dropping the rate, and Myers heading out again for the road to sell, can they find a buyer? That we should know in the next two to three weeks. The other is how Myers does in the third quarter. While we won't officially know until the early November earnings releas, if they can't sell the debt before then, it is a good indication the results won't be good since the buyers will want that info. That will put into question the deal pro formas and models.
GS likley has its lawyers looking over the Myers reps and warranties in the merger agreement to see what leverage they have to force concessions, or to claim a MAE, so they can walk.
My guess is that the deal has a 75% chance of closing now. If it doesn't close, look for a special shareholders dividend and for the Myers CEO to be replaced.
<<Two other big deals just got called off this week>>
Which two are you talking about? I only can think of HAR.
Does any one think MYE deal is dead? Or the current low price of &19.76 is over reaction?
The other deal was Genesco. Here's the link to the Times article:
I have no idea if the deal is dead but the discount to the cash out price sure seems to be steep. Markets have been wrong before.