The stock of UTStarcom (UTSI), a provider of IP-based network solutions, is climbing after Shah Capital made an indication of interest in a potential proposal to acquire the shares of the company it does not already own. WHAT'S NEW: A consortium led by Shah Capital, which currently owns 17.6% of UTStarcom, said in a filing that it expressed interest in potentially buying all of the company's outstanding shares for $3.20 in cash per share. Such a proposal would represent a 45% percent premium to the closing price of the shares on March 25 and a 17% premium to the volume-weighted average closing price of the shares during the last 30 trading days. The consortium may want to buy all of the outstanding shares through a one-step merger of a newly formed acquisition vehicle with and into the company and plans to finance the purchase through a combination of equity and debt capital. In addition, Shah says the consortium has been in talks with "leading financial institutions" and received a letter dated March 25 "indicating that they are highly confident of their ability to fully underwrite the debt financing" for such a deal. WHAT'S NOTABLE: UTStarcom's stock is down 8.17% over the last three months. TODAY'S PRICE ACTION: In mid-morning trading, the stock spiked 49c, or 20.76%, to $2.85.
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