they will announce preliminary results on Monday morning and final results about 2 days after that. You will get your money 2-3 days after the final results are announced.
im pretty certain that im actually wrong about the value of the tax loss asset, there are regulations restricting companies from utilizing tax loss assets from companies they buy in order to prevent tax loss "harvesting".
based on what i read on macabacus on "net operating losses", they are worth very little.
i believe an acquirer can use the unrecognized loss of $93 million on the broadview common as a tax loss carry forward. They can do this by using the other tax loss carry forwards that MCGC has to "mark up" broadview back to face value or what was paid for it originally, then sell broadview and recognize an accounting loss of $93 and use that to offset other profits. At a 35% tax rate, this asset is worth about $32 million at face value or 87 cents per share. Of Course we can't expect to get full value for this but i would bet the acquirer will look at that as a valuable component of MCGC.
I believe the remaining tax loss carry forwards that MCGC has can not be transfered to the aquirer for them to use. They can only be used to mark up existing assets that MCGC has to face value.
I am not a tax expert so maybe im wrong about this but it would explain why they keep Broadview around and from what ive read about tax loss assets, this seems to fit.
Sentiment: Strong Buy
I get 4.84 as of the end of Q1
i include .075 for pharmalogic and there is .02 for another million shares bought back in january and .055 for another 2.1 million in income on 37 million shares outstanding.
4.69 was better than i was expecting.
might see the company sold the day before or the day earnings are announced.
If not, then it could be a while longer but i would think that this is less complicated than most situations like this because the value of the company is not really very debatable since neither side has much leverage so negotiation would occur in a very narrow range of prices. Its win/win for both sides. For MCGC to sell everything in one transaction and a win for the buyer to deploy some cheap capital and acquire a nice set of high quality assets all at once at a fair price.
well it looks like they really are selling the company, and i believe that they have been in negotiations now for at least 3-4 weeks already judging by when the buyback bid seemed to disappear.
should get NAV in the buyout, maybe more if some of the stuff on the books looks better then we think, ie the Radio Pharmacy loans. Don't see why they couldn't get NAV because they could alternatively just officially go into the liquidation and accomplish the same thing, it would just take longer. So i would accept some discount to liquidation value, but it shouldn't be significant. Thats just worst case though.
my nav calculation was 4.64 before the investment sale and 4.72 after assuming a 3 million gain and another 500k shares bought back.
yes i agree, the language in the last earnings release about all those strategic alternatives was new, clearly they are up to something. Worst case they could just go into liquidation and give us a series of special dividends.
i could be wrong but the stock doesn't seem to be acting as if a buyback is in the market anymore. Perhaps they are in advanced negotiations to sell the company? i can hope.
the only transactions that have occurred in the past 60 days was the 235k they sold at $3.75 (almost certainly the dutch auction). that is what the filing says
i dont know why they arent listed among the top holders, but how would you explain their cost basis of under $3 per share?
Plus this from Richard Fearnon (he runs accretive capital partners) on seeking alpha March 11, 2014:
"Accretive Capital Partners has been a significant and supportive shareholder of MCG Capital Corporation for more than five years. We believe we are among the largest owners of MCG Capital stock, with approximately 1.8 million shares held by our fund and its affiliates."
I really don't understand why they wouldn't be listed has a major holder, if infact they have been long time holders of that many shares...
But they started this drive back in March of 2014, so they must have been shareholders then too...
they purchased those shares years ago, sold 275k in the dutch auction. good to see that they are holding the rest because it means they believe this will continue to play out in their favor, with the big payoff yet to come.
If i were you, i would offer my shares at $15.60, you can probably buy them back for less afterwards if you wanted to.
i trade virtually all dutch auctions so im here for that reason. About 90% of the time I tender all my shares because im just trying to arbitrage the situation. This will work too, there is no precedent that i'm aware of for a company not following through on a tender offer. The lowest price possible is 14.6, so you are guaranteed at least a prorated tender at that price if you tender. I think it is highly unlikely that we get into an oversubscribed and prorated situation on the bottom of the range. I think it is much more likely that we see a price of 15.6 when its all over, or at least something close to that. I think anything below $15 is very unlikely.