At 12.63 v possible YE '15 NAV of 21 with low stock option dilution at that market price Granted there are peer BDC's at substantial discounts but with higher leverage. US Earnings Calendar (google it) has scheduled earnings release after the close on Feb 22nd. That should be revealing..
Thanks for the explanation. Regarding ACSF I have concerns: I don't like the ACAS management and am anxious to exit so I don't want more exposure to them. Also, the fee structure is excessive, although temporarily reduced. Lastly, concerning margin ACAS has higher loan value being over $10 than ACSF.
I agree. More importantly, my experience is that good news is usually preceded by a rising stock price (sad commentary on the state of insider trading) and, therefore, it appears that there is probably no good news on the horizon.
The NAV per share continues to erode despite NOI and share buybacks. The conclusion is that as they contract the balance sheet assets are sold for less than estimated value. The markets recent performance is not encouraging as to the sales process. BDC discounts are plentiful.
I have difficulty understanding what interest ARCC would have in ACAS at any significant premium to present market price of ACAS. ARCC sells for 13.27 for a 21% discount to 3Q NAV of 16.79 and 8.6 times estimated EPS for '15 of 1.54.
The problem here is that as ACAS moves to cash it is selling assets for less than the estimated values and thereby reduces NAV per share. NOI and buybacks are used to mitigate these losses.
Only hope is to sell and liquidate all assets and perhaps there will be a resulting NAV north of $15 per share.
Are you saying that an owner of ACAM could net $164 million with no management expenses other than those netted against the $164? If so that could command a price of about $2.5 billion (about 15 PE) which could be about $6 per share more than that in NAV.
Thank you for that explanation. Therefore, ACAM on a stand alone basis could perhaps earn about $139 million Clearly, this supports the $4 in NAV assigned to ACAM but not sure as to what premium it might command..
The trouble I have with the ARCC scenario is the high single digit PE ratio or ARCC. If ARCC were to issue shares they would not want the deal to be dilutive. This would require not paying more than about nine times for the earnings acquired.
Using cash they could probably pay up to 15 times earnings acquired but could be constrained by the BDC limitation of debt not exceeding equity.
Is that legal for CS to be buying when they are privy to the status of the bidding for the sale of the company?
Or is ACAS going through the motions in order to placate Elliott but not putting their best foot forward?. Such as telling prospects things they would rather not hear. The market tends to rise in advance of good news when lots of bankers and lawyers are involved (unfortunate but largely true) and this is not happening.
We are taking about a company not a division. Why isn't the stock price rising? There's got to be dozens of lawyers and bankers involved If there is good news ahead the market price should be moving up (sad but true)..
Thanks for your input. There are many different responses to a company being offered for sale. However, at this stage for ACAS the bankers should know about how many and generally who are interested. If there was a strong possibility that it might go for say 18 or more I would expect the current market price to be at least 16 plus. The current price of about 14 could mean that a potential sale may not be much more than 16. Granted this may not be accepted.
Possibly, but that's before taking into account the dilution from stock option exercises which would bring NAV down over a dollar (depending on a bunch of assumptions).
I am in the same ball park as you. I am hopeful that there will be more than $16 but I realize that it may not be. We don't know what the current NAV is. The 4Q $19.88 was inflated by up to $1.50 by not recognizing the dilution from stock options. So with a first quarter write up from income and stock buybacks the current NAV net of option dilution may not be greater than $20 A sale a a 20% discount would bring about $16. My best hope for more is by sale in the market place of most assets rather than bulk sale or sales to strategic buyers.
I agree with you that the best strategy is to wait. However, the question is for how long. Certainly going out 6 months or more would indicate a poor level of interest by prospective buyers and would run an increasing risk of a recession and/or a bear market.
I agree with you. I didn't intend that as a precise or a precise estimate. But many on this board ignore the dilution when computing the discount to NAV and then discussing possible sale targets.