RE:This one's over boys!a) Deal falls through: Shareholders get to keep shares of what the management wanted all to themselves and get paid a 6.3% dividend.
b) Deal goes through: 13% dividend which is actually 19% if it trades down to current market value. Founders will own Pivot and they have insider information; would they want Pivot all to themselves and pay a 13% dividend if they were indifferent on the company’s future?
c) Founders up the deal: You say same result, I say same response. Not sure what the "better deal" would mean but if all else stays equal and the value is increased to $0.80, the current yield would increase from 19% to 21.4% which is very attractive if insiders are buying the company. Also, they don’t get paid unless the pref holders do.
Reboot wrote: It's a wash no matter what happens. Mr. Market has spoken and this one's only worth 47.5, for now. Everyone was holding for the big $1.50 buyout that's a pipe dream based on performance.
Best quote from management so far..."the Special Committee elected not to engage in a formal process to seek potential alternative transactions, as it was considered unlikely that a superior proposal would materialize". I don't know what's worse, if they believe this, or if they are lying to you.
What? No better offers? Didn't they confer with Crookie or lscfa? This bad boy's worth $1.50 USD, you know, because they're in the US.
So, the deal falls through, no one is going to step up (according to management), and it stays in the 40's, maybe less.
If the deal goes through, the sp of the new offering drops down to wash out with the 40's share price conversion. Who's going to keep their 12% dividend when they get no disclosure on operations, no voting rights, and lower liquidity? After a few months, no one will even know about the new security, so less buyers.
Option 3, the founding fathers up the deal...same result...sp drops back to pre-conversion pricing.
Seriously, ask yourself who wouldn't buy this stock right now to get the 70 cents...and then ask yourself why it isn't happening.