If SWHC buys some portion of Cerebus, is it bullish or bearish for SWHC and/or Ruger? Also, if Ruger buys some portion of Cerebus, is it bullish or bearing for SWHC and/or Ruger? Please discuss.
They are both up on the speculation of acquisition. Either one that does not acquire will fall. Either one that acquires, anything could happen, up or down. Often the market punishes the acquiring company share price. But if the deal is good enough, it could up instead.
Not sure I agree that both are up on speculation of an acquisition. SWHC is not really up. I think the market understands that until the tender offer is cancelled, SWHC is not a player for an acquisition. Ruger may be up on that speculation, but Ruger prior to today was way oversold and was due for a reversion upward. From a technical standpoint, today was a big day for Ruger. It was either going to breach its support level and drop farther, or it was going to rebound. Candlestick pattern was showing bear strength diminishing, so not surprised by the move upward; I am just surprised by the strength of the move upward which could indicate some speculation on a potential acquisition.
Today looked like short covering, then the volume dried up. I admit to being interested in the timing here - I don't think it's coincidence.
Perhaps Cerubus is trying to assuage its liberal constituents with an announcement. But to that I say, nah. Announcing a stalking horse cancellation prior to a deal being done is gauche. That announcement was done with furtive purpose.
Remington is an awfully good brand name and rounds out the product line. If acquired at a decent price it will buffer the company when and if the self-defense and LEO markets stabilize.
In general, could be some synergies involved where the whole is greater than the sum of the parts. Ruger is already looking for another plant. Maybe they could forego that if they acquired another company with usable floor space and equipment.
What portion and what purchase price, lol? I guess what I'm saying is that it is so speculative and hard to judge without having access to the companies in question's books. Even then it'd be hard. I think it comes down to how much faith you have in the managements of the two companies.