Notwithstanding any other provision of the Offer, we will not be required to accept for payment, purchase, or
any entity, “group” (as that term is used in Section 13(d)(3) of the Exchange Act), or person has acquired or proposed to acquire beneficial ownership of more than 5% of our outstanding Shares, whether through the acquisition of stock, the formation of a group, the grant of any option or right, or otherwise (other than as and to the extent disclosed in a Schedule 13D or Schedule 13G filed with the SEC on or before the date of this Offer to Purchase); any entity, group, or person that has filed with the SEC a Schedule 13D or Schedule 13G relating to S&W on or before the date of this Offer to Purchase has acquired or proposes to acquire, whether through the acquisition of stock, the formation of a group, the grant of any option or right, or otherwise (other than by virtue of the Offer), beneficial ownership of an additional 2% or more of our outstanding Shares; any new group has been formed that beneficially owns more than 5% of our outstanding Shares (options for and other rights to acquire Shares that are acquired or proposed to be acquired being deemed to be immediately exercisable or convertible for purposes of this clause); or any entity, group or person shall have filed a Notification and Report Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or made a public announcement reflecting an intent to acquire S&W;
Well if we put on our smoking hats for a second...
Since a few of you are tossing out there that S&W seems to be fending off a buyout. Who would want to buy a gun company besides an ATK which already bought one, or some other defense company? A better question is who might be willing to spend the cash, or better yet who needs to unload a gun company?
In 2009 when the gun market was starting to get a little attention Freedom Group (which was smaller than than today) had reported net sales of $427.3 million for the six months ended June 30, up 34.9 percent over the year earlier period, and net income of $32.8 million.
Or basically an entire years worth of swelling gun sales revenue in 2012/13 for SWHC. Keep in mind Freedom is basically an all long gun company.
After seeing the trifecta of Deutch Telecom / T-mobile / MetroPCS I can’t help but think a similar reverse merger could be at hand with the likes of Cerberus / Freedom Group / S&W. Seeing as how Cerberus still needs to unload Freedom, and its IPO cash out failed miserably it’s not outside of reality to see this happen. Merger happens, S&W Holding Company becomes Freedom Group Holding Company and S&W just another neat portfolio division printing money.
Such an action would explain the need willingness of management to not participate in the tender offer because they ring the register like professionals. You’ll want to have fewer shares out there to block any vote of a reverse merger as well, so figure that SWHC management is just buying out shares to vote how they want to go in a reverse merger take.
Figure it’s a rare win – win – win, Cerberus cashes out in shares they can sell at any time, SWHC management can go back to being the middle managers that they are, and shareholders get a slice of a bigger company with sharks for managers.