CML HealthCare Inc CMHIF

Why a $0.27 discount to offer price?

[HippygirL74]

Does anyone have an explanation to why there is a big discount to the $10.75 offer price?  If the offer is $10.75, then why not buy more now at $10.48 and get another $0.27 out of the trade?  Thanks in advance.  HippygirL

[Al42]

It is strange...but notice it trades almost the same price as yesterday less the 13 cent dividend. I'm guessing it will trade closer tothe offer price sometime in september before the deal closes.

[HippygirL74]

Hi Al42,  it is indeed strange to sell at a discount.  Usually the sp drops by the dividend amount on the x-div date.  But why offer any discount when the buyer states that they will take every outstanding share at $10.75?  Imagine if shorts needed to cover and they had to pay above $10.75?  Wait a minute... i have an idea. 

[Al42]

I'm pretty sure most of the shorts covered the day before at the open. I sold all my shares at 10.62 today. I figures with the dividend of 13 cents plus the 10.62 i get the offer price and i'm happy to redeploy the money in another loosing venture.

[carrier]

Initially it was @ 10.60 but went ex-dividend on the 26th.  So the stock dropped the 13 cent and you are right, why not add more which I did.....now today its biting its way back up.  I think the discount is about the nervous nellies that may think the sale may not go through, so for them they would rather sell at the discount.  I got mine to sell @ 10.70  hoping it climbs up

[Al42]

Nope..I don't think there is any question on future dividens as the news release states. The second quarter dividend previously announced will be paid to shareholders on July 19, 2013, but no further dividends will be declared in anticipation of the consummation of the transaction.

[HippygirL74]

Hi again, if i was OMERS i'd be buying as much as possible below $10.75.  The savings is huge.  Even today with 4.5 million shares changing hands, that would be approx. $900K in savings just from today, not to mention Thursday and Wednesday's action.  And when they  take our shares, we don't have to pay commissions to our brokers.  It's a win for

[when2buy]

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[HippygirL74]

Hi when2buy, thanks for your thoughts.  Good profits to you.  Hippy.