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Neogen Corporation (NEOG)

NasdaqGS - NasdaqGS Real Time Price. Currency in USD
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21.93-0.35 (-1.57%)
At close: 04:00PM EDT
21.98 +0.05 (+0.23%)
After hours: 05:03PM EDT
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  • a
    arro1050
    I am a 3M shareholder and currently hold 1,000 shares in my Fidelity account. I just got off the phone with a Fidelity rep and put in an order to exchange 200 shares of 3M for NEOG shares. The exact exchange ratio will be based on the average closing price of 3M and NEOG on 8/25, 8/26 and 8/29. The deadline to participate in the exchange is 8/30, after which the exact exchange ratio will be posted on 3M's website.

    As @bpowers has already stated, if the exchange offer is over-subscribed to, 3M shareholders who entered orders to participate in the offer will end up having a smaller number of their 3M shares exchanged for NEOG shares and if the NEOG shareholders vote against the deal next Thursday, no exchange of shares will be executed.
  • J
    Jziggyp
    If the exchange offer is terminated by 3M without the exchange of shares (but the conditions to consummation of the proposed transaction have otherwise been satisfied), 3M intends to distribute all shares of SpinCo common stock owned by 3M on a pro rata basis to holders of shares of 3M common stock, with a record date to be announced by 3M.
  • b
    bpowers
    I’d like to try to summarize the deal that is in place for 3M and Neogen shareholders. Please let me know if I get some of this wrong, thanks! Back in December 2021, 3M and Neogen agreed to create a bigger, better company by agreeing to merge 3M’s Food and Safety Unit with Neogen. I’m going to make an assumption here… I’m guessing that both entities had roughly equal value because the new combined company will be owned roughly 50 / 50 between Neogen shareholders and 3M shareholders (at least 3M shareholders who choose to participate).

    The end result for Neogen shareholders is that their company will double in market cap (due to the merger), double in share count but the share price should remain roughly the same as it was the day before the merger. Additionally, the new company should have most of the benefits that Adent (Neogen’s CEO) told the market about back in December of last year. (See the article titled: “Neogen CEO touts deal with 3M’s food-safety unit…”)

    Regardless of what happens for 3M shareholders, the deal today is the same as it was back in December. There won’t be extra dilution for Neogen shareholders because the split defined in the deal has nothing to do with the current share price of either company. The deal is and has always been to merge both food safety entities (3M’s Food and Safety Unit + Neogen) and share the new, bigger Neogen roughly 50 / 50. (Actually, participating 3M shareholders will have 0.1% more shares than current Neogen shareholders).

    For 3M shareholders, there is a limited number of shares of the new entity that they are allowed to purchase. The grand total of roughly all outstanding shares of Neogen just before completion of the deal plus 0.1%. The offer they have on the table is to either trade shares of 3M for shares of Neogen, and get a 7% bonus for participating in the exchange, or do nothing and any shares that aren’t subscribed will be distributed to 3M shareholders.

    By the way, in spite of the deal remaining unchanged for the last 8+ months, 3M shareholders who participate are getting a lot more bang for their buck by exchanging their shares now because the price of 3M has remained relatively stable for the last eight months while the price of Neogen shares have been nearly halved. I expect that some of that has occurred due to bigger traders and shorts playing games with those who don’t fully understand the deal. I also suspect that it will be game over once this deal completes at the end of this month. Time will tell, but I’m betting we’ll see the new Neogon start to take off soon after the deal completes. If you check out the options market, you’ll see that I’m not the only one with this belief as there’s some rather unusual call activity today in the Neogen Sept $30 calls.
    Bullish
  • b
    bpowers
    For anyone who still doesn't recognize the value of the upcoming merger, there was a very good interview between Jim Cramer and Neogen's CEO John Adent on January 10th this year. The complete interview is 6:47 minutes long and covers a lot of details and can be seen by visiting Neogen's Investor Relations page. A shorter, partial segment (2:21 minutes) can be seen by searching YouTube for: CEO John Adent on CNBC's Mad Money. Personally, I found the longer version to be much more enlightening.
    Bullish
  • C
    Clidinho
    I appreciate additional insight to this proposed stock exchange. Here are my initial, and very high level thoughts: #M will allow us to buy NEOG with a ~7% discount, but making each $100 bucks of 3M worth $107 (frankly, I am not too excited about the 7%...please enlighten me). NEOG pays no dividend, which is a key reason why I own 3M. Lastly, if I do nothing, will be value of the new "NEOG" be owned by 3M? Basically, I dont fully grasp to what will happen to the "NEOG's equity" that is currently owned by 3M to those 3M stockholders that chooses not to do the exchange. I welcome all insights.
    Bullish
  • B
    Big Joe
    The prospect of being bought by Minnesota Mining & Manuacturing didn't make this share price jump?! Wow.
  • C
    Clidinho
    @Pam, and others, I appreciate the answers, but there is one thing that still bothers me, if this is such a great deal, why is NEOG share price continues its downward spiral? I am keeping my 3M shares exactly where there are and may buy NEOG on the side, but need to do further DD. I wish well to all NEOG longs.
  • b
    bpowers
    Jziggy recently called insider buys a huge pump to suck buyers into exchanging their shares… Apparently missing the real reason! That being, they bought shares because “they are a good investment”. As far as I can tell, it really doesn’t matter how 3M spins out their Food and Safety Unit (aka SpinCo) just as long as the spin out completes. The “exchange” is a special offer by 3M to their shareholders by which they can invest with a 7% bonus. I doubt any insiders at Neogen care whether the 7% bonus occurs or not. After the “exchange” offer is over any unsubscribed shares will be distributed to 3M shareholders. It’s pretty clear the merger happens on the first of next month and I t’s pretty much a forgone conclusion unless, the shareholders of Neogen vote against it (FYI, I’ve already voted my proxy for the merger). If that happens, then yes 3M will terminate its “exchange offer” to 3M shareholders and the merger is either over or it goes back to the drawing board. The management of 3M is giving shareholders a gift by offering the 7% bonus towards the purchase of SpinCo shares. That’s the equivalent of nearly two years of dividends “paid up front”. That’s in addition to the dividend they get by holding 3M shares past the 22nd of this month. Little retail investors seem baffled by the offer and are so skeptical that many probably won’t participate in the exchange. Meanwhile savvy institutional investors are the ones who want their shares; you see, there are a limited number of SpinCo shares up for grabs and institutions can buy more if retail investors pass. I’m guessing it will be fully subscribed and afterwards these smaller retail investors will no longer be invested in SpinCo or Neogen. Instead they’ll see the price of their stock remain flat as 3M retires all the shares that were traded in. Then again, the whole thing could fall apart after Tuesday’s vote by Neogen shareholders. Time will tell.
    Bullish
  • b
    bpowers
    There are a few people here who don't seem to understand the upcoming 3M + Neogen merger and some even think 3M is purchasing Neogen. Here is a pretty good explanation of the deal by the CEO of Neogen, John Adent. It might also be worth noting that John has recent dropped over $400,000 buying up more of his company's shares. Perhaps this deal is more bullish for Neogen shareholders than many realize. Time will tell...
    https://cryptohoarding.com/2021/12/15/neogen-ceo-touts-deal-with-3ms-food-safety-unit-says-it-improves-blockchain-innovation-cnbc/
    Bullish
  • a
    arro1050
    @Pam On what basis do you believe that the share price of NEOG will douple after the split-off is completed at the end of this month? Also, what was the cause of the 50% drop in the share price since late last year?
  • b
    bpowers
    Neogen is down roughly 51% since the 1st of the year whereas 3M is down roughly 16%, yet I’m pretty sure Neogen has greater growth potential and even more once the merger is complete. Is there any wonder why the CEO of Neogen has recently bought shares in his own company? Look it up, it’s been a really long time since insiders at 3M bought and held new shares. Personally, I wish the merger would just hurry up and complete so this stock can start to show it’s true colors... Tic toc
    Bullish
  • P
    Paul
    I’m noticing that both the Neogen and 3M Q2 earning reports are out July 26. I wonder if we’ll get an update on the deal?
    Bullish
  • d
    dc
    for some reason, it looks like a turn is here, ER, momo, healtcare sector turning bullish..
    whom knows but I'm in, first tranche
  • D
    Duke
    Patiently waiting for indications that the 3M / NEOG marriage is going to be profitable to NEOG shareholders. It may be time like the person who annually suggested that NEOG start paying a dividend, may be correct! With the estimated 9 billion dollar market cap, you need to get something, for hanging around.
  • b
    bpowers
    I’m not one who normally wants to see a class action against a company, but I’ve been invested here for a long time and I am upset to see this drop from a forty dollar stock to a twenty dollar stock since they announced their planned merger. Perhaps management should step up and explain why this is really a positive for shareholders. So far it looks like investors were thrown under the bus.
  • R
    RainbowMeow
    If picking stocks were as simple as digesting readily available public disclosures and observing various metrics from financial statements, then everybody could do it. Yes, NEOG has had a string of mediocre quarterly earnings reports, again, anyone can see this, no secret. So why is NEOG one of the best performing companies YTD (actually up for the year)? Well, you need to stop speaking to analysts and look deeper.
    Bullish
  • R
    ROBERT
    I have had this stock many years and done very well with it. At present it no longer seems to be the kind of growth stock it was in the past. I think that it may be time for Neogen to consider offering a dividend.
  • D
    Duke
    At some point with the types of testing products NEOG produces, it seems like a good opportunity for NEOG to look at producing test kits for the marijuana industry. Mold, Ecoli, etc. Thoughts?
  • D
    Duke
    Neogen Corp. is changing post the Herbert era. Non responsive to phone messages left. Investors Relations position not filled since the departure of the gentleman who was in the position until late last year. I don’t like what I’m seeing long term holders.
  • R
    RainbowMeow
    $86.17 close today marks yet another 52 week high. This stellar company has only three remaining analysts following it, as one by one, analysts dropped it in frustration after seeing the stock go up and up while they had "neutral" ratings on NEOG. I've been long since $7.50 per share
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