RE:RE:$4.52 is our de facto price now.... (11%+)
Alphaseeker1984 wrote: dosperros - unfortunately this deal seems to have limitations on how much stock one can elect to take in exchange so the upside is capped for TMB shareholders at a little over 1/3 of the increase in RYAM shares going forward until the deal closes. Perhaps that is why the investigation has been initiated. I suspect that TMB and RYAM have their bases covered with fairness opinions which have been properly vetted so I am not holding out hope that they bump up the price. IMO the only hope this deal would have of being upped is if another offer were to materialise from another strategic (Sateri, Borregaard, etc...). My guess is that has been explored and it a no go as well...but I would be happy to be wrong.
From the press release:
"These elections are subject to proration to ensure that no more than 63% of the aggregate Tembec shares shall receive the cash consideration and no more than 37% will receive the stock consideration."
Good Catch...
Based on $USD Conversion one has to determine what the 37% RYAM shares will convert to.
Lets use todays closing prices and 10,000 TMB shares for illustration purposes for example:
6,300 TMB Shares at $4.05 = $25,515.00 $CAD
3,700 TMB X 0.2302 = 852 RYAM X $14.76 = 12,575.72 $USD
From news release the conversion at 1.3428 X $12,575.72 USD = $16,886.41 $CAD
$25,515.00 + $16,886.41 = $42,401.41 $CAD or $4.24 per share.
closing price of TMB today was $4.17....
One has to watch.... If a person can be guaranteed that the deal will go through, it may be prudent to sell your TMB today and just buy RYAM. Chances are the full value of TMB would be recognized inside RYAM and could cause that share price to increase past the $14.76 $USD on todays close.... (may be why there has been heavy volume in both TMB and RYAM today)
Just an observation I thought I would share.
Good Luck,
FI4