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Mitel Networks Corporation Message Board

  • pac257 pac257 Nov 25, 2013 4:44 PM Flag

    Merger Arbitrage Bargain

    11/25/13

    Aastra closed at $37.98

    Mitel closed at $8.46

    Aastra shareholders will get 3.6 shares of Mitel (MITL) plus $6.52 cash for each Aastra share after the merger.

    So, $37.98 minus 3.6 shares of MITL at $8.46 each ($30.456) = $7.524

    That's $1.00 more than the merger price today for Aastra.

    That's MITL at $8.74 to equalize or arbitrage.

    So, today MITL was selling at a bargain price trading between $8.26 to $8.46 closing.

    Good luck to all good people.

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    • 1/17/14

      Aastra closed at $47.40

      Mitel closed at ONLY $10.04

      Aastra shareholders will get 3.6 shares of Mitel (MITL) plus $6.52 cash for each Aastra share after the merger.

      So, $47.40 (Aastra ) minus 3.6 shares of MITL at $10.04 each ($36.144) = $11.26

      That's a total of $4.74 ($11.26 minus $6.52 cash) more than the merger price today for Aastra.

      So, MITL needs to be at $11.36 to equalize or arbitrage.

      1/17/14 MITL was selling at a bargain price of ONLY $10.04 closing.

      Good luck to all good people.

    • Arbitrage UPDATE:

      MERGER: Aastra share holders are to get $6.52 cash and 3.6 shares of MITL for each Aastra share.

      So MITL would have be at least $9.66 for the equation to balance:

      3.6 TIMES Mitel at $9.66 per share PLUS $6.52 cash = $41.30

      At ONLY $8.73 Mitel is ALMOST $1 UNDERVALUED PER SHARE

      THAT'S AN ARBITRAGE BARGAIN FOR AASTRA SHAREHOLDERS

      Good luck to all good people.

    • In terms of the current arbitrage equation:

      Aastra price now = $41.61

      MERGER: Aastra share holders are to get $6.52 cash and 3.6 shares of MITL for each Aastra share.

      That means MITL would have to rise to at least $9.75 for the equation to balance:

      3.6 TIMES Mitel at $9.75 per share PLUS $6.52 cash = $41.62

      At $9.12 Mitel is too cheap right now

      Good luck to all good people.

    • The Arbitrage:

      With Aastra shares at $42.50 today and the merger deal setting the balance at $6.52 cash plus 3.6 MITL shares for evey Aastra share, MITL should continue rise to at least:

      $9.99

      That's $42.50 minus the $6.52 cash = $35.98 divided by 3.6 = $9.99

      Good luck to all good people.

    • Hey, pac.....it's interesting you're the only one here when this stock has been doing so great. Where's all this volume coming from? Every day, accumulation on above average volume. Any thoughts on the upcoming earnings report?

      GL longs

      • 1 Reply to baycash38
      • The reason both MITL and AAH.TO have been up almost every day since the merger was announced:

        See my earlier message, CHECK THE MERGER MATH but, if you just go by earnings estimates without the addition of Aastra, the estimates of 85 cents profit for the year are enough to project a fair market price of $17 per share.

        That's the consensus 85 cents per share profit times a very low (for this industry) P/E ratio of only 20 to 1 = $17.

        Furthermore, same industry, market darling EGHT will only make about 19 cents per share and they are priced at an insane P/E ratio of 55 to 1 at a ridiculously overpriced $10.43 per share. If Mitel was priced at a 55 P/E it would be selling for $46.75. In fact, Aastra makes far, far more than EGHT does right now.

        EGHT Net Income (ttm) = $7.26 million

        Aastra Net Income (ttm) = $38.8 million

        Aastra Net Income (ttm) ALONE is 534% better than EGHT right now.

        Anyway, I think Mitel makes or beats their 19 cents quarter estimates and that puts them even more undervalued. That's way undervalued BEFORE the Aastra merger boost.

        That's Mitel = $21.40 FAIR VALUE AFTER THE MERGER IN JANUARY 2014.

        At $8 Mitel is a super steal.

        Good luck to all good people.

 
MITL
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