I'm unsure? If shrholder suit takes hold this will add uncertainty as to whether buyout goes through? As the mkt. hates uncertainty this could be a negative drag on the stk.? Does anyone think that Cubist will up the ante to make this go away? Would any buyers today be eligible for the $2 payout for sale goals met? If offer by Cubist increases would today's buyers benefit? THANKS IN ADVANCE!
If one has 13.50 lying around that they do not mind tying up, then trading the CVR value might not be bad.
You do not have to wait 4 years on this, once the selling of pressure of those who are impartient (or have better use for the cash) dries up, then the implied CVR price might well move from the present .26 towards .50 - .75 or so.
In one way that's a small move ($13.76 to $14 and change) , but if one is just looking at the risked amount you are taking an easy shot at a double.
So the answer really depends on if you have a bunch of cash with no place to put it.
I would consioder the possibility of a broken deal (either good or bad) very slim, one can presume management already ran some trial ballons past the larger holders.
the buyout has tentatively placed a bottom o$13.50 on the SP with minimal downside risk unless Cubist withdraws their offer, which is unlikely. Anyone owning shares at the close of this offer is eligible for the $2 CVR
As to the upside gamble there are several possibilities
1.we get another bid from Cubist adding the $2 CVR to their base line offer. In view of the speed at which the class action was launched, many shareholders were not pleased with their initial buyout deal. SP would pop to $15.50
2. Either Bayer or Pfizer and a remote possibility a hedge fund step in and offer the $15.50 outright or even up the anti by a few bucks. $15.50-$20 is possible.
WAIT & SEE
The answer is time vs profit.
If you own and want a quick profit, sell now.
If you're willing to wait or if you buy now you should ultimately get more money, but it might take three years or could be tomorrow.
In any case if you hold till the time is right you will not lose any money.
You have my word on that.
No need to wait for CVR. Just hold the shares until the BO date (couple of months from now) and you will get cash for the shares while added for CVR portion in 2 years.. Assured way of getting $2 more if you ask me