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Nordion Inc. Message Board

the_zen_zephyr 6 posts  |  Last Activity: Oct 29, 2014 5:40 PM Member since: Oct 2, 2007
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  • Reply to

    bally buying SGMS?

    by chasmyrbella Oct 29, 2014 12:45 PM
    the_zen_zephyr the_zen_zephyr Oct 29, 2014 5:40 PM Flag

    Unfortunately, none of the ways you describe are contemplated by the merger agreement. Alot of things could happen, including me waking up with a supermodel in my bed. None of those things will happen unless the merger agreement is amended, and, in all my years of doing arb, I've never seen a merger agreement amended in a way to change the capital structure as you describe. Perhaps this will be the first, I guess we'll see. Presently, the market is giving about a 60-60% of the deal being completed on the terms contemplated by the merger agreement, more ore less.

  • Reply to

    bally buying SGMS?

    by chasmyrbella Oct 29, 2014 12:45 PM
    the_zen_zephyr the_zen_zephyr Oct 29, 2014 1:49 PM Flag

    Oh, and the tape is possibly spooked today due to that train wreck 5yr bond auction. Interest rates rising on that part of the curve does not bode well for getting the paper moved with a favorable coupon.

  • Reply to

    bally buying SGMS?

    by chasmyrbella Oct 29, 2014 12:45 PM
    the_zen_zephyr the_zen_zephyr Oct 29, 2014 1:43 PM Flag

    See my other post for what could happen. The financing didn't fall thru, its hung. Not good, but fall thru means just that, no deal. They could try to market it again, or the underwriters could provide it, or it could fall thru. Tape is a bit spooked today, that's for sure.

  • Reply to

    so what does todays news

    by boorner_here Oct 27, 2014 2:01 PM
    the_zen_zephyr the_zen_zephyr Oct 28, 2014 7:42 AM Flag

    It means they will either have to market the paper again, if and when the junk markets improve, perhaps change the terms (OID, coupon, or both), and then get people to bite it. Or, the underwriters will have to be willing to step in and carry it on their own books.

    You never want hung financing, but it doesn't mean the deal has been canceled, only that the risk of failure has increased. The risk now is correlated to stability in the capital markets, in particular the high yield market.

    FWIW, talk in the arb community is that Perelman is agitating for a price cut, but this is only a rumor. And, if you have to increase the coupon, the math on the overall deal becomes less tenable.

    Good luck.

  • Reply to

    Nice takedown to get your shares. I bought more

    by nazawall Oct 27, 2014 10:12 AM
    the_zen_zephyr the_zen_zephyr Oct 28, 2014 7:33 AM Flag

    If the deal fails, it will likely go to the low 60s. Even cheaper at that level. Good luck.

  • Reply to

    Nice takedown to get your shares. I bought more

    by nazawall Oct 27, 2014 10:12 AM
    the_zen_zephyr the_zen_zephyr Oct 27, 2014 11:17 AM Flag

    Financing reportedly hung. Good luck.

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