What is real valueOf course, we all look at our cost base and determine how much money we will make. Since very few bought above CDN $3.80, most will make money.
Nonetheless, the crucial quesiton is what is fair value. My suspicion is that it is greater than CDN $3.80 per share.
I am please that SVC has structured the deal such that there is a 42 day "go shop" period to solicit other bids (with a termination fee of CAD $8.4 million during that period).
I am somewhat concerned about the management of the company (the Rolling Shareholder) agreeing to exchange an aggregate of 5.1 million shares (representing the majority of their common share holdings) for shares of an affiliate of Scalar Acquireco. Scalar Acquireco has been being granted a five-business-day right to match any competing proposal.
Who is Scalar Acquireco? I presume that company is owned by Vector Capital. If so, an affilate of Scalar Acquireco has been set up to acqure all of shares of Sandvine except those of the Rollling Shareholders (Management) who are joining the affilate. This implies that current management wants to replace us (current sharenolders) with new owners (Venture Capital). Current management keep their jobs and Vecotor Capital has the choice to keep or sell the firm at a later date.
Note from the description below, Vector Capital is not actually an operating company in Sandvine's sphere of operations. Rather, they are a finance company that specializes in capital solutions. They do not operate technology firms themselves, but rather own a portfolio of such firms. Thus, they need Sandvine's management at the current time.
I suspect that there will be some technology firm (not a finance firm) that will see more value in Sandvine. That solution, however, may not guarantee jobs for existing Sandvine management.
If the company is for sale, I am hoping for a bidding war -- not a price that perpetuates the jobs of management.
Vector Capital's description of themselves : "For nearly 20 years, we have partnered with management teams to transform and grow technology businesses. Our experienced team of investing and operating professionals leverages its deep technology expertise to tailor capital solutions for each of our investments. Since our founding, we’ve made investments of over $3 billion through buyouts, recapitalizations, corporate divestitures, credit securities and restructurings, and minority investments."