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SB Financial Group, Inc. Message Board

  • dtejd1997 dtejd1997 Jul 9, 2012 9:05 PM Flag

    If there is a buyout

    Hey all:

    Just a bit of speculation on my part on the subject of "if there was a buyout"...

    Depends on who is buying it out...

    If it were management, I would try and do an asset writedown and take a big charge for goodwill or the data processing division. That would take the market price down and would also knock down book value.

    This leads me to the next point. Assuming earnings are continuing the way they should be, book value should be getting close to $10.50/share. If the bank were to be bought out, I would think there would lawsuits a flying if it were at or below book.

    In order to induce shareholders, I would think the offer would need to be AT LEAST $11/share, perhaps even $12/share.

    The problem is...who would pay book or maybe a small premium? I just don't know. The only bank mergers going on in mid year 2012 are FDIC directed for the most part...

    The other problem with a buyout would be that if I had "hot" money to put to work, I would probably want to take out something at a wide discount to book...but then you go back to the first problem...Aggrieved shareholders are NOT going to sell out at discount to book if they can help it.

    I hope I'm wrong, but unless earnings start accelerating even MORE than what they have, I just don't see a buyout happening.

    The picture will become somewhat clearer in a couple of weeks when earnings come out 7.24.12.

    Any thoughts?

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