This stock is killing me. I only hope this is a repeat of last year's drop down into the 5s and then rebound into the teens. Long term this company is sound, but the lack of price support absolutely sucks.
I don't know but it seems quite clear to me. It says:
"Assured has agreed to pay Dexia Holdings total consideration of approximately $722 million (based upon the closing price of Assured's common shares on the NYSE on November 13, 2008 of $8.10), consisting of $361 million in cash and up to 44,567,901 Assured common shares, subject to adjustment in the event of issuances of Assured common shares prior to the closing at a price less than $8.10 per share. "
So if the AGO shares are below $8.10, as they currently are, the 44,567,901 can be increased. For example at Friday's close, $6.55, the number of shares would presumably need to be increased to 55,114,503. If I am reading this correctly, which I certainly think I am, that’s 10.5 million shares more. A dilution in my books! There is still a lot of time till the deal closes so stock price can change and therefore the resulting effect on the calculations but at the very lease I wanted people to be aware of this, in case they did not.
Of course, I am hopping the stock will be over 8.10 by the close but the potential it will not be is a risk.
I have read the entire Prospectus. The "dilution" corresponds to the value of assets and cash-flow of FSA (in the minds of board members anyway). Is it a good deal for existing shareholders of AGO?...only time will tell.