RE:Competing bid??Senior1 . Do not rule out a competing bid this early! The offer has only been out 2 weeks and there is plenty of time for alternative bidders to consider the desirability of owning Avigilon.
I have experienced several buyouts. The last one was Sandvine. In May, 2017, Vector Capital made a firm offer of $3.80 per share for Sandvine when the prior day close was about $3.15. A special committee of Sandvine’s board said the offer was fair. The board approved that recommendation and set a date for a special shareholders’ meeting. What we shareholders do not see is what is going on behind the scenes. Sandvine had been entertaining offers for several years and had received several unsolicited offers. Accordingly, the board was familiar with offers. Nonetheless, the board attached a “go-shop” provision to their recommendation.
The share price rose above $3.80, indicating that the market expected a competing bid. It took considerable time for a competitive bid to emerge from PNI Canada Acquireco Corp. PNI and Vector Capital then traded competing offers before Vector decided not to match. The eventual PNI share offer was $4.40 in cash.
In the Avigilon agreement with Motorola Solutions, all shares are to be purchased for $27. Since the recent share price has not gone above that level, it appears the market is anticipating the deal to go through. I must admit that Motorola Solutions is a good strategic fit for Avigilon, especially since Avigilon to supposed to continue as a stand-alone entity. Nonetheless, I believe Avigilon is worth much more than $27 per share for Motorola. What is needed is a second bid, as occurred in the Sandvine takeover, to test my theory.
The deal is expected to complete sometime before June 30. There is still plenty of time. We do not even have a date for the special shareholder’s meeting to approve the deal. In the Sandvine case, the special meeting was cancelled once a better offer prevailed.