Posters to the Sirit Inc. (TSX: T.SI, Stock Forum) Bullboard were overwhelmingly disappointed with the news that it would be taken over. They blamed management, and hoped for a counter offer.
Shares of the radio frequency identification technology company rallied 13% to 29.5 cents on the news, suggesting that there may not be a white knight in the wings.
Before markets opened, the company announced that it had agreed to sell itself to Federal Signal Corporation (NYSE: FSS, Stock Forum) in a cash deal, which values the company at about $49.5 million. The offer comprises 30-cents per share, and according to the press release, represents a 37% premium over Sirit’s 30-day closing average.
Urging a shareholder revolt, campst noted that it had been done before. The poster said he was motived. “Those opposed to this deal must become organized. Nothing will be achieved by saying we will vote NO on this or any other board. We have to know that management has their ducks lined up and already have a large block (if not a 2/3 block) ready to vote YES.”
Taking a pragmatic view, lulu61 wrote: “While I respect that you all have the right to make your opinions known (and I like the thought of management scrambling to return all the angry calls) , I'll remind you that the options for Sirit are somewhat limited. They can't go to the market for additional financing (they can't show a strong backlog of orders, they continue to burn cash, they've made promises that they haven't delivered on) and the road is short if they aren't bought out. I'm sure more cash was sucked up in the advisory process and quite frankly, I think this is the only positive out for the Board and management. Take your cash and turn your attention to something else.”
Federal Signal shares were down on Thursday, pointed out Mickey12, suggesting that they weren’t especially impressed with the deal either.
Some posters took the news very personally. EHV8TOR wrote that it was “more than money,” and that shareholders were on “the verge of realizing [their] dream.” The sense of betrayal was echoed by FireandRain50: “Now that the business is poised for the exponential wins, we get pushed aside without a thought.”
Others suggested they weren’t ready to fight a battle. “I am disappointed with the news as well. I will be out by the end of the trading day today,” said HawkT.
But overall, the mood was of resignation, as evidenced in this post from crewskud10: “
Over the last six months it appeared that things were coming together. In retrospect I can now see the increase in share price was due to a deal being cooked up in the background, rather than solid sales numbers. Sirit has had a cash flow problem for a number of years and likely realized they could not generate the critical mass needed to be really successful. The obvious answer was to sell the Company, as raising cash for a high tech venture is not as easy, as raising money for a new gold prospect presently.”
