The nice thing is this is really a perfect environment for Bluegreen right now. Economy growing slow but steady and rates stay low so no margin compression.
micro - My point is if they did a stock for stock exchange it would not be at $21. It could be at the same 5.39 ratio it was before.
If BFCF buys the rest of BBX and lowballs it will cause a lot of problems. They did a tender for $20, so obviously they think it's worth quite a bit more than that. Of course as a BFCF shareholder we'd rather them pay as little as possible, but I'm not sure why they'd want the overhang of another lawsuit for years which will cost them millions in legal fees and then leave it up to a judge to decide what the value of BBX is really worth in which case they can end up getting socked. The judge can say it was worth $35 (plus interest) and that would end up costing them a boatload.
If BFCF does a stock for stock merger they can offer the same 5.39 ratio and I can almost guarantee the majority of BBX shareholders will be happy with that. It would be virtually impossible for BBX shareholders to make a case that they were getting ripped off because you are no longer relying on the value of one company, you have to take into consideration the value of both BFCF and BBX. It's easy to make the case that if BBX is undervalued then so is BFCF and vice versa and that the merger benefits both parties by simplifying the structure. BFCF owns 81% of BBX plus the rest of Bluegreen so it's pretty easy to compare the two. Yes there will be some share dilution. I think maybe around 15% or so, but they would also be getting the additional 20% of BBX which includes the rest of Bluegreen and a bunch of quality real estate, so I don't think this will drag down earnings. The end result would be a company that would attract a lot more interest from investors compared structure they have now.
The news came out after 8150 closed I believe. It just seems they don't know how to be conservative in their guidance. They did the same thing last year. On the last CC one of the analysts specifically asked them about their guidance and that they would need to be at over $160M for 3Q and 4Q but they said they were still confident based on customer demand. Now they say $150M. They don't even give a range which is very odd.
It's quite a conundrum. There is still a wide disparity between 8150 and IMOS. There is still the promise of this big China expansion next year. Plus I still think the Tsinghua deal has a good chance of happening. I wish I knew how long it will take for TW to make a decision on the Tsinghua deal.
micro - I own both, but a good amount more of BFC. I would be fine with the stock merger for a number of reasons. BFC already owns 81% of BBX, so issuing shares for the additional 19% would not be very much. If BFC tries to do a forced buyout they will easily have to offer in excess of $20. So right there they would have to offer a sizeable premium to the current trading price and they could still be subject to an appraisal rights lawsuit if they don't offer enough. If they do a stock for stock merger then they really don't have to offer a premium at all since you have two underpriced companies combining. In fact the companies are trading very closely to the previous merger ration before they cancelled it. The companies are even more similar now that BFC owns 81% of BBX. Yes BFC is more weighted towards Bluegreen than BBX, but the point is a lawsuit would be much less likely if not impossible (I'd need to try to research the law on that ) and it would be much harder for BBX shareholders to prove that they are getting ripped off. As a BBX shareholder I would be more than happy to combine based on the previous merger terms and I believe almost all other BBX shareholders would be fine with it too. So in reality the stock for stock merger would probably be better for both shareholders in the end.
Part of the condition of the stock merger has always been an uplisting to a major exchange (which would be either NYSE or Nasdaq). That's why there will be no merger until the uplisting is complete.
No. The $20 purchase last year was a tender offer and was completely voluntary so you have no right to sue. A forced buyout is completely different and shareholders have a right of appraisal if they vote against the buyout. Considering BBX's current stated book value is $20.50 one would expect a significant premium to that price to begin with and one could make an extremely good argument that the stated book value itself is significantly understated.
I don't think anything would stop them from a squeeze-out except that they would probably be sued just like they have in the past. I know I would not be happy with $20-$21 for my BBX shares and would vote against the buyout opting for an appraisal. I think it would be pretty easy to prove the shares are worth much more (especially using comps for DRII). It doesn't matter how much of a premium they give if they are underpaying. So then they'll have to go through yet another lawsuit, legal fees, etc.
That's why I believe a stock merger is much more likely and would be would be harder to battle in court. For that BFCF will need to get uplisted though which won't happen until the appeal is complete.
Always possible, but the price didn't drop right down and there still seems to be some buying going on with decent volume. Of course the person can be pretty patient since there doesn't seem to be a lot of competition on the buy side.