Yongye International, Inc. (NASDAQ: YONG) Attracting Investor Attention Following $334 Million Buyout Offer
Posted on October 15, 2012 by Editor
With news of a proposed sale of Yongye International, Inc. (NASDAQ: YONG) to a consortium led by its Chairman and Chief Executive Officer, Mr. Zishen Wu shares of the Chinese plant and animal feed maker spiked to a high of 5.88 on Monday, just 0.02 off of its 52-week high, and well above its 50-day moving average of 4.30 and their 200-day moving average of 3.66. Along with a surge in their share price YONG has seen trading volume top the 3.6 million mark late in the day’s session.
As part of the “going private” proposal letter from Zishen Wu, Full Alliance International Limited, MSPEA Agriculture Holding Limited, and Abax Global Capital (Hong Kong) Limited an acquisition vehicle will be formed for the purpose of completing the acquisition at a purchase price of $6.60 per share of common stock in cash, making the deal worth about $334 million.
Of course news of the proposal letter triggered an immediate response from a securities litigation firm that said they were investigating “possible breaches of fiduciary duty and other violations of state law in connection with the proposed sale.” As stated in a press release issued by Levi & Korsinsky, the investigation will concern, among other things, “whether the proposed consideration to be paid to Yongye shareholders is unfair, inadequate, and substantially below the fair or inherent value of Yongye. In particular, Yongye stock has a reported book value of $7.64 for the most recent quarter.”
While the 6.60 per share represents a 38% premium over YONG’s closing price of 4.79 on Friday there are many that believe shareholders would be leaving a considerable amount of money on the table if the proposal ...
Those law firms are looking for business. They will win no matter whether the case is successful or not. If you are too greedy and too naïve and believe and follow them, you will end up making them rich and nothing more for yourself and even worse.