Banca I.F.I.S Spa BNCIF

RE:17Digger - for you... I want your opinion...

[17Digger]

Look at the merger problem this way

The market is valuing CSK at about 14 1/2 cents a share.

A hair more than 4 shares of CSK will get you 1 share of the new amalgamated FCC stock.
That means the market is now valuing the new FCC stock at about 4 x 14 1/2  = approx. 58 cents a share instead of its last traded value of 76 cents.

At this point, if the maket is right, FCC is set to fall about 16 cents a share or 20% when trading resumes in FCC.

To me that is simply the effect of diluting the FCC stock with so many new shares.

The market is saying that both FCC and CSK were worth higher share prices as separate companies. 
It is pretty clear that neither one's share price wins with this deal, nor do their shareholders.

So now, you can test out this forcast by looking at CO1 stock in Australia which trades now. That stock sits in the 10- to 12 cent range before and after the merger announcement and they will have %55 of the new company i.e. control.

CO1 shares have not risen on the merger deal even with that good news about gaiing control. CO1 shares are pretty much unchanged.  So there is no winner there either.

This analysis shows that the 3 companies do not win do not win from this deal , nor do their shareholders either. 

Obviously any ethical manager of these companies ought to be in the same boat ...  a sinking one according to Mr. Market.

The recent CSK share price action is the canary in the coal mine for this merger deal.  Watch what it is telling you.