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Tenneco Inc. (TEN)

NYSE - NYSE Delayed Price. Currency in USD
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16.96+0.22 (+1.31%)
At close: 04:00PM EDT
17.06 +0.10 (+0.59%)
After hours: 06:29PM EDT
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  • I
    Incognito
    Step right up boys and girls, not too late to get in for the push to a cool $20.00 dollar bill for each of your shares.
  • I
    Incognito
    June 7 is coming fast. Then on to close.
  • D
    David
    It is 3 weeks until shareholder vote now. Once they have shareholder approval the pressure will be on Apollo to close. Clearly there are skeptics on whether the deal will close or there would not be such a big disconnect between the stock price and the offer price. The piece that many are missing is Apollo biggest cost of the acquisition is absorbing TEN debt which is $4.4 billion on a net debt basis and the $20 per share offer price only represents about $1.6 billion or so. The point being a few dollars on the stock price is pretty meaningly less to Apollo relative to the deal. As so many have said in the past few weeks it is really difficult to see how Apollo could easily back out at this point. When the car industry gets back to normal production levels TEN will make a phenomenal amount of money and Apollo knows that.
  • I
    Incognito
    How would the vote not succeed? You get a 25% boost on the current price to say yes.
  • r
    roberta
    If Apollo were to purchase ~5% of the shares at the current price the overall cost of the buy out would drop to ~19 ...not a bad discount. One has to wonder if the steep drop is not manipulated for this purpose.
  • B
    Bjohn
    Remember that Carl guy who said "given the price action the merger must be in trouble". Man...so many merger amateurs these days. Clearly going through...
    Bullish
  • C
    Clearstone
    Just some thoughts: proxy states the deal is not subject to a financing condition… Reiss also led Apollo’s b/o of ABC Tech… classic White Knight situation… Rowan just completed the biggest deal of his career in buying Athene - he has to put the annuity premiums to work similar to Berkshire… Leon Black stigma… termination fees hurt, losing the Mgmt, banking fees for Apollo adds to the hurt… Probably let Tegna go before Ten
  • C
    Clearstone
    Based on comments here, there does seem to be some short-interest in TEN right now. Very small float and short losses capped at $20. If there is anything wrong with the deal, TEN would not have announced that the deal “Was on Track.” And the TEN deal would have been brought up on the Apollo earnings call this week - either Mgmt or sell-side analysts - nada.
  • C
    Christopher
    Look at 10Q, $3bn of their $4.9bn in debt is based on 12month libor rate. 12month libor rate up 2.5% since deal announced. That’s 70million per annum in extra costs. In addition that $3bn in debt all due by end of 2023. Apollo would need to replace it all and given rate environment and fears of looming recession, banks will want a lot more interest then even the new high rates they are paying. That’s why this thing is trading at such a discount to the deal price. Smart people know they will have to change the price in order to make deal work, even if it can work…….
  • C
    Carl
    If Apollo was so afraid that TEN might get a higher bid that they put in a large penalty if they accepted one, they must have felt that TEN was a valuable commodity. I only have a couple thousand shares, but I see no reason to dump now. If Apollo walks away, TEN will get something like $125 million, so they will be a more attractive acquisition to another buyer. With the proxy vote going on right now, it tells me that TEN believes that the deal is going forward pending shareholder approval.
  • C
    Carl
    Apollo must have know that TEN had other interested buyers, otherwise they wouldn't have put in a penalty for accepting a higher offer. Since the deal was done in Feb., I would expect Apollo knew how TEN was trending. If Apollo backs out, TEN get around $1.25 a share plus it could sell as low as $18.75 and still net it shareholders the $20. Ironically, TEN is not down anymore than many other stocks in this very unstable market. Good luck!
  • J
    Joseph
    It seems to me that at the current price this stock is trading at, even if the deal is not completed it would not be a terrible buy. I mean the worst case scenario if the deal doesn't close is that you bought the stock at a very good price & you have to hold it for awhile. I don't see the downside of buying here, what am I missing?
  • C
    Clearstone
    My last post may have been too short and confusing. The mkt makers (ibanks) on the deal would support the arbitrage usually. I don’t think they are here. Real push to convince those who bought above $20+ as recently as last 12 mos that they can lose more if deal not done. No way Apollo walks - would cause layoffs within year. Apollo is buying to invest in turnaround.
  • D
    Danny
    Shorts are going to get HOSED. There's an over 11 % short interest as of 4/14/22; and, they only have weeks, or a few months, to cover.
  • C
    Carl
    According to the Ten share count, Apollo would have to pay something like $1.25 a share to walk away from the deal. That doesn't make sense to me since Apollo has been trying to buy TEN for awhile.
  • C
    Chris
    Apollo only had one or two deals that did not go through in their entire history and those were over disagreements in pricing. Prices have already been agreed upon in this case. Tenneco is a great strategic acquisition in the automotive industry that fits in great with their portfolio. Apollo executives know how to close deals. There is not going to be any renegotiation of pricing. This deal will close at $20 sometime in the fall.
  • C
    Carl
    Just thinking, if Apollo doesn't follow through with the purchase, I believe they have to pay a hefty chunk of cash, and I believe they also put in a penalty if TEN found a higher bid. It certainly appears to me that Apollo really wants this purchase to close.
  • D
    David
    I reviewed the Proxy last night but have to admit being 300 pages my review was not as detailed as I would of liked. A couple of comments that were interesting was once all conditions are met they have 3 days to close. They continue to indicate closing in 2nd half of the year. Interesting since if the shareholder vote is on June 7th they could close as early as June 10th. The time period for the U.S. government to question for Hart Scott Rodino (HSR) has passed so they effectively have that approval. Various foreign approvals appear to be pending. An interesting comment was Apollo could wave the approval requirement for Ukraine & Russia. What was interesting was how much time had passed regarding negotiations with Apollo. They had been negotiating for years around different deal structures. That shows to me how committed Apollo is to this deal. They have spent an incredible amount of money and time on this deal already. Which still makes it hard for me to understand the disconnect with the $20 offer price and the current share price. Has anybody done a detailed review of the Proxy and identified any issues of further concern?
  • C
    Christopher
    @roberta, @barry….. read page 61 of the recently filed proxy statement “ limited guarantee”. This is the so called break up fee. Technically Barry is right that they cannot just walk away without breaching the merger agreement. This is why they then have this clause which limits Apollos damages for breach of contract at $115mm. This is standard stuff in merger agreements and is why people call them break up fees. So the reality it doesn’t matter why Apollo breaches the agreement they are only on the hook for $115mm. Period.
  • d
    david  h
    just got my proxy and notice of annual meeting

    stock is held at Charles schwab and I just voted LOL this is definitely going to happen I am going to buy more on margin now to add even more to my position. free money.
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