M / F Sell Recommendation Sell CRH Medical
Fellow
Stock Advisor Canada Fools,
This morning came word that
CRH Medical (TSX:CRH) was being acquired for US$4.00 per share by
WELL Health Technologies (TSX:WELL) – a roughly 83% premium to the closing price of CRH last Friday. The stock has rocketed more than 80% today in response and currently sits just a hair below the buyout price (at the current USD/CAD exchange rate the buyout price is approximately $5.11 Canadian dollars versus a current trading price as I type of $5.02). The deal is expected to be completed in Q2-2021.
From our vantage point, we think this deal is pretty much “done” and advocate exiting your shares now. Sure, you could hold out for that extra nickel or dime of proceeds (depending on where you get out/what the exchange rate is at the time of your sale), but we don’t think holding out for such incremental gain warrants the risk of holding and seeing the deal fall apart. Understand, we don’t think deal implosion is very likely either…but the risk isn’t zero and not worth the potential incremental 1.7% share price gain from here.