LEAF shareholders were had! Filing Complaint!
At the time of the deal announcement (May 11), LEAF shareholders were lulled into believing ACBs offer of 3.575 ACB/LEAF represented a 34% premium. While 34% sounds sweet, it had nothing to do with any commitment between the two parties. It was merely an observation and simply represented the premium gap between the 20 day Volume Weighted Average stock price ratio ending May 11 and the stated offer (3.575/2.686). The actual stock price ratio on that date was 3.086 and the actual implied premium on that day was 15.9%. Given that this deal was an all stock transaction, that is not much of a premium to my way of thinking.
On July 18th, the day of the vote, the actual price ratio between the two companies narrowed to 3.2% of stated deal ratio. The higher price ratio was achieved by upward price of LEAF shares and lower price of ACB shares. The effect being the implied LEAF price upon acquisition dropped from $28.85 per share to $28.46 per share. Still this may have swayed some LEAF holders to vote "yes."
After the yes votes, share prices of both companies were manipulated downward. Company announcements had no effect on price. Driving the price was the maintenance of price relatives between the companies = deal ratio = 3.575. Upon the last day of closing prior to delisting (Jul 26), actual LEAF price $24.47 = implied LEAF price ~ $24.49. In other words LEAF holders received a zero premium for this deal! What is worse is that this the implied premium price is actually less than the price LEAF was trading at on the day the deal was announced May 11th. And this all happened after both parties received a yes vote.
It is also noteworthy that ACB in particular traded at $6.85 on July 26 (last day). From a statistical standpoint, ACB has traded at or below this price less than 1% of the time since the deal was announced!
I for one believe that there was collusion between the parties as well as the brokerages involved with this transaction. I invite those quants out there to explore how the RSI drove the price relatives to exactly 3.575, and eliminated any premium to LEAF holders all for the benefit of allowing the principals of LEAF liquidity to cash out on the backs of its shareholders.
For my part, I am registering a compaint with the Investment Industry Regulatory Organization of Canada (IIROC email: enquiries@iiroc.ca) and because IIROC is a self governing body also with the Ontario Securities commission (email: inquiries@osc.gov.on.ca). I urge those of you feel were wronged by this deal to do so like-wise.
ACB LEAF Act P_ratio Deal P_ratio Imp Prem % Imp LEAF Price
20 day VWA price 5/11/18 $8.19 $21.98 2.686 3.575 0.331 $29.26
20 day VWA price 7/18/18 $9.39 $28.72 3.058 3.575 0.169 $33.58
20 day VWA price 7/25/18 $8.29 $27.50 3.317 3.575 0.078 $29.64
Price as of 5/11/18 $8.07 $24.90 3.086 3.575 0.159 $28.85
Price as of 7/18/18 $7.96 $27.57 3.464 3.575 0.032 $28.46
Price as of 7/25/18 $6.94 $24.64 3.550 3.575 0.007 $24.81
Price as of 7/26/18(last day) $6.85 $24.47 3.572 3.575 0.001 $24.49