The deadline for closing is something like "within a week of getting all required approvals" AND no later than 12 February 2016.
October, given the CFIUS approval requirement, may be aggressive.
I am toying with the idea of adding to my position here.
This is getting ridiculous.
After the earnings report, but prior to the takeover announcement, the stock was trading over $4.50.
The deal is at $6.58.
The stock, at $5.50, is telling us the odds of the deal closing are only 50/50, approximately.
"Step right up folks, and make your bets"
What do you expect the share price to sell for if the deal does NOT go through?
I think it should sell for more than $4.58, personally.
Therefore, at 5.68, the market is saying there is only a 50% chance of the deal going through, excluding the (relatively small) cost of financing a position.
Up 49 cents on a nasty down day of -0.85% on te S&P.
I'll take it!
I like being short these Sep 5 puts that are going to expire worthless.
The repurchased $25 million in Q1 and $50 million in Q2.
There is $143 million remaining on the authorization which can, of course, be increased by the Board at any time.
But, just because they have not reserved for the judgment ordered by the court, does not mean they will not preserve their liquidity in order to meet the judgment should that become necessary.
The problem is, the stock faces a binary event. If they lose the appeal they need the liquidity and thus they cant buy back alot of stock with that liquidity.
If they win the appeal, having maintained their liquidity, the stock will skyrocket, and the value creation opportunity of a buyback will have evaporated.
Yes, I did not see the CFIUS issue until after I posted this.
However, because of their product line, I think it will be a trivial matter; there are no security issues involved from what I can see. of course that doesn't mean that they won;t take forever to clear it.
13E? What is that? I believe the only form PLNR has to file is the proxy for the extraordinary shareholder's meeting. (Leyard filed a Form 4 of some sort yesterday just outlining the transaction terms).
Yes, closing by the end of October is very optimistic.
By the way, there is a February 12 "drop dead" date at which point either side can back out.
It is a normal provision in a deal like this and typically gets extended when government agencies are foot dragging, as they often do.
The annonucement was August 12th.
Hart-Scott-Rodino gives teh FTC 30 days to ask for documents, otherwise, the deal is "approved."
Since there is unlikely to be an anti-trust objection, September 12th is an approximate date on which PLNR can publish a proxy soliciting shareholder votes to approve the deal. The proxy will set a date for the meeting.
It seems to me the date could be a month to 6 or 7 weeks from the date of publication.
Assuming that Leyard has no "approvals" it has to get on its side, and assuming that the
financing is ready and waiting, this deal could actually close by the end of October!
That makes the annualized rate of return here VERY high, with the stock trading at $5.78 as I type, that's 13.8%.
So why is it so big?
One reason I have discussed is the uncertainty related to China and Leyard's ability to close.
another poster provided some good info on the lending facility they will use to close the deal. Good work!
Another reason that the gap is so large is
1) there is little in the way of institutional analyst coverage of the stock, but more importantly:
2) the total amount of profit to be made would be $21 million if an arbitrageur could acquire 100% of the shares. Let's assume they could accumulate 10% of the company while waiting for the closing.
That would amount to a potential profit pool of about $2 million. it's just too small a payday to attract alot of attention from professional risk arbitrage firms, in my opinion.
This is nonsense.
Just because the hedges roll off does not mean that existing wells will stop producing.
It simply means that the company has to shut down its drilling, and it means the creditors take
over. They are as interested in value preservation as the next guy, and they will keep the existing
wells pumping. Then they will sell the wells to somebody that can pay as close to full value for them as they can get as a bankruptcy court seller.
I just noticed that Leyard's stock has been "trading halted" since the last week of July.
That's because it is listed in China, where a large number of stocks are "trading halted" by edict of the communist government there, which is seeking to protect its citizens from falling equity prices.
I would have to imagine that such a trading halt leaves alot of investors skeptical about the deal.
Personally, I don;t see any problems with it.
We should get Hart-Scott-Rodino antitrust approval within 30 days of the 8/12 announcement date, or shortly thereafter.
The next event will be PLNR scheduling a special shareholders meeting to vote on the deal.
I am guessing that the meeting could be held within a month of the notice being given, with a closing possible even before the end of October. There's no reason to think the closing would be at the end of Q4.
The PLNR statement is "during Q4."
With production growth of oil approach zero percent, the pipeline companies are continuing to put newly-finished pipelines into service. Every pipeline put into service diminishes the amount of crude that needs to move by rail. its pretty simple.
Still, the existing fleet needs to be replaced.
But, the railroads have had #$%$ earnings and will be loathe to order new ones.
Fortunately, crude cars are FAR from the entire story.
I must admit to knowing NOTHING about Leyard.
I have never heard of them before this.
Any background on their size, age, etc would be welcome.
I did see an article on my Bloomberg that they are "applying for a foreign currency loan" to complete the acquisition, which means they did not have financing guaranteed before PLNR signed onto the deal. Having a "highly probable letter" is normal course for a domestic deal. Not having one may explain some of the size of the discount.
Really? It's "tough to see?" Why?
Every day the Chinese market drops is a higher probability that the deal doesn't close, right?