RE:RE:RE:RE:Clarification from RBC, if you don't tender "Option 7"Tri5cui7 wrote:
Can someone explain to me how the proration would work? If you have 100 shares at todays price will they actually be converted into $43?
Well, since nobody has been kind enough so far to take the 100 shares off your hands, please note that I am willing to sacrifce myself and take the hit by digging deep into my pockets for $43 in return for all 100 of your CMED shares. LOL
Seriously though, this is how I perceive the situation as per a post I had made about a week ago:
longonMJ wrote: Yes indeed, we will not know how much cash we will be receiving until all of the shares have been tendered.
Based upon the process which they have here, you will only receive the full $43 for all of your shares which you tendered under the all-cash Option 2, BUT ONLY if approximately less than 13.25% of the outstanding CMED shares are tendered under this all-cash option.
To me, this means that a minimum of 13.25% of your shares will receive the full $43 cash payout and this percentage will increase if more shareholders go for the all-share Option 1 as their selection. The remaining balance of your CMED shares that were not paid out at the full $43 payout will then be converted into Aurora shares at a multiple of 3.4X the number of remaining shares.
I can certainly see this percentage going higher than the minimum 13.25% since anybody that does not bother to call in their tender will be deemed to have selected the all-share Option 1 by default. In addition, some shareholders will feel that the long-term prospects for Aurora is so good that they would like to hold as many ACB shares as possible.
Of course, it should be pointed out that the CMED shareholders could simply take the cash they received and use it to purchase back the same amount of Aurora shares at the lower market price if they are trading at less than $12.65. That is why it is in Aurora's best interest to have their share price as close as possible to this implied $12.65 share price to make it not worthwhile and too much of a hassle for the CMED shareholders to even consider taking the cash option and then using this money to repurchase their "missing" ACB shares more cheaply on the open market. Of course, if the share price is already over $12.65, then it's a no brainer to take the all-share option.
Sounds as though my default option of all shares might not be exactly correct, although this is possibly the likely choice that Aurora might choose for anybody that does not bother or forgot to call in to tender their shares. I guess only time will tell as to what whats to the non-tendered shares.
Bottom-line: Anybody selecting the Option 2 or All Cash Option will be receiving somewhere between $5.70 to $43 for each of their shares that are not going to be converted into Aurora shares.