onemodolar
10 years ago
Guppi00 is right.
If you don't believe in CVR, just sell the sh before 6/20 and cashout to move on. There is risk you may not be able to exit if you do not sell before 6/20.
If you believe in CVR, you can either tender sh before 6/20 or hold it without tendering. As Guppi00 says, you will NOT lose anything even if you don't tender voluntarily. same $6.44 plus CVR.
It's better to tender now if you want the deal closed and paid in 1 month. You will still be paid higher price if there is higher bid before deal closure. Again there is NO financial discrepancy between voluntary vs. involuntary tender. every share holders will be treated equally.
I tendered my share because I wanted CVR and paid as soon as within 1 mo rather than later. I want to roll my money in this bull market, but everything is too expensive now. Locking my money for 1 month may provide me better bargain entry point in stocks I am watching when I get fresh dry powder from CHTP later.
Knowing my weakness of lacking discipline and patience, it seems not a bad idea to tie myself down with 2 inches thick steel rope.
onemodolar
10 years ago
Guppi00 is right.
If you don't believe in CVR, just sell the sh before 6/20 and cashout to move on. There is risk you may not be able to exit if you do not sell before 6/20.
If you believe in CVR, you can either tender sh before 6/20 or hold it without tendering. As Guppi00 says, you will NOT lose anything even if you don't tender voluntarily. same $6.44 plus CVR.
It's better to tender now if you want the deal closed and paid in 1 month. You will still be paid higher price if there is higher bid before deal closure. Again there is NO financial discrepancy between voluntary vs. involuntary tender. every share holders will be treated equally.
I tendered my share because I wanted CVR and paid as soon as within 1 mo rather than later. I want to roll my money in this bull market, but everything is too expensive now. Locking my money for 1 month may provide me better bargain entry point in stocks I am watching when I get fresh dry powder from CHTP later.
Knowing my weakness of lacking discipline and patience, it seems not a bad idea to tie myself down with 2 inches thick steel rope.
Guppi00
10 years ago
Tendering your shares means you agree to the price of $6.44 + CVR payments. If they get 51% of shares to tender, then it doesn't matter if you personally like it or not because the majority rules (more or less, but you do have legal options if you really wanna try to fight it...good luck). If the majority of shareholders agree to the deal, then the deal happens regardless of what the minority want.
If you're not happy with the price, don't accept the tender offer. If 51% vote against the offer, it's possible they get another higher offer from Lundbeck or maybe someone else....or a lower offer....or maybe no other offer at all. Risk is the name of the game.
Just know if the tender offer is accepted by 51% of shareholders - you're pretty much locked into that same deal. Your shares disappear and you get $6.44/each with the potential for $1.50 in CVR payments. Doesn't matter what your vote was. You don't get special treatment based on your own vote - the majority's opinion is the only thing that matters.
Best of luck
Guppi00
10 years ago
You will need to be holding your shares at the time of the deal closing in order to receive the CVR payments. So if you sell now, you're only hurting yourself IMO since you're giving up .10/share that could potentially be $1.50/share. I'd say it is more of a present/expected value type calc - the chance of them hitting each sales target * CVR payment discounted to today @ i%. I think the value is greater than .10/share personally.
The option activity has been interesting too - some significant buys on the $7 strike calls leads me to believe that others are expecting an increase whenever the tender offer actually is commenced. I don't believe they have actually filed the paperwork yet, unless I missed something someone please correct me if I'm wrong.
I would say that once the closing date nears, the price rises to better price in the risk associated with the CVR payments. Right now, as I mentioned, they are only valued at about .10 (current stock price - cash buyout price). I expect that to increase closer to .50 or more by the deal close date otherwise you could buy one day before the close and for a very small fee (.10) you could have the potential $1.50 in payouts over the next few years. Huge return yes, risky yes, but I think the market will price that more accordingly as the date nears. Depending on each individuals expected probability of Lundbeck hitting sales and personal discount rate, that's when I would say it is time to evaluate if the risk is work the return.
Guppi00
10 years ago
I need some help understanding why people are buying a significant amount of June, September, and December $7 calls?
The price is "fixed" at $6.44/share whenever the deal closes. So where is the value in these options that I am not seeing? Covering a short position doesn't really make sense to me and I can't see a strong potential for the stock price shooting up above $7 before then (although, I will admit that a better offer is a possibility, but I wouldn't feel comfortable betting hundreds/thousands in options on the possibility...)
Anyone with a theory, I would appreciate the input.
moneycents
10 years ago
If the $1.50 CVR was added to the $6.44 for $7.94 I would think that would be a low but reasonable offer. Even then, with all of the talk from analysts looking at $10, $12 range, an $8 offer would be the minimum low ball. However, the $1.50 is 3 years away, so practically speaking we have to consider $6.44 which is far too low. A lot can happen in 3 years. Anyone looking at MACK?