Don't drink all the Kool-AdeVery random thoughts from a not-very-committed shareholder:
- Under the NCIB the company bought back 5 million+ shares at about $6.04 per share. You would have to think any takeover bid would have to be nicely in excess of that price.
- The weighted average exercise price of some 2.8 million stock options outstanding is $8.60
- There are billions and billions of private-equity dollars sitting in takeover funds. Buying CTS just before a recession would take some nerve, but remember, the potential audience here is the professional investor class. These people know one should buy high and sell higher. Putting that axiom into practice is hugely difficult in the teeth of a recession.
- The greatest impediment to a deal is probably management, or rather, management's expectations. If bids cluster around the $8 level, will management accede? Or will they reject on the theory there's much more available at the end of the rainbow.
- Age-old dilemma: $8 today or $10+ some years down the road. Having spent 2 years or more assembling this baby, there's substantial risk management can accept someone else's idea of value here.
- If an $8 bid is rejected, expect this baby to visit the $3 level in the proverbial blink. Obviously, I don't know the risk of this negative scenario playing out, but it's a lot higher than 5% IMO. Likely more like 25%.