CANEXUS CORP 6.5 PCT DEBS T.CUS.DB.D

Question from a newbie?

[UnverifiedUser_308020]

Long time lurker, first time poster...

CUS takeover value was 0.153 SPB shares per CUS share. CUS currently trading at $1.33, SPB trading at $10.87. $10.87 gives CUS a present value of $1.66 (or a premium of 25%) over todays prices. 

Is the large discrepancy because the closing date is so far away (Q2 2016)? Or because the market believes the deal will not go through due to regulatory/shareholder issues? 

I am not a great trader, but 25% in 6 months doesn't doesn't sound like a bad punt, especially if CUS has done their homework on the regulatory issues.

[Calgaryrider]

The market is saying that this deal isn't going to happen.  It has nothing to do with the closing date. Any trader would take a 25% return in 6 months. Ask yourself, why would the CUS Board accept what appears to be a substandard offer? I mean, if you really felt the organization you were responsible for was worth more than $1.70 in a short timeframe and you felt you could right the ship

[dinosaur13]

I see your point, but what good would come of shareholders squashing the deal? If current management is responsible for running this company into the ground (as posters on this forum indicate), why would shareholders want to prolong their agony? Wouldn't it make more sense to have SPB take over, and start to right the ship? Full disclosure: I don't own CUS or SPB, but buying CUS at a

[DerbyDog]

These two posts tie in quite nicely with my own thoughts on the subject from last week. Thanks again to all for keeping the conversation thoughtful. Although by saying that I probably jinxed us and we will start hearing from the trolls! I find myself thinking: 1. If the deal fails the SP will probably be under pressure short term, but we still own a good to great business and if management

[dinosaur13]

Thanks for the message! My opinion is that if the deal is squashed CUS will re-rate at a much lower price point (ie sub announcement) for the forseeable future. I don't know if there are any other suitors for the CUS assets, and the market seems to hate the current management of CUS (I can see both of these weighing on the share price).  To answer your question about if anyone on the

[dinosaur13]

Also, if you wanted to test the water on how a potential shareholder vote would go, read the announcement on Executive compensation from the AGM on May 7th.  95% (ie 111million) of votes were in favour of approving CUS's executive compensation. 5 million (roughly 5%) voted against. This tells me that the shareholders who voted, trust management at least enough to approve how much they

[DerbyDog]

Lord knows my vote wouldn't make or break the deal! It's in the hands of the big institutional players and let's face it, always was! Thanks for quoting the SPB presentation. I like the idea of this deal getting done as it is the shortest route to adding value and income to my portfolio. -Just being honest! As for current directors not having skin in the game, might not hurt to see

[justabystander]

Carfinco went through a similar situation a while back (check out the old messagebaord and news releases if you are new to holding a stock that was bought out and care to read some related info), but had some contentious issues (delays, Spanish bank during euro slump and foreign approvals needed) that made some messageboard posters quite skeptical that the buyout deal would close.  There

[greenrain]

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[dinosaur13]

I read those articles as well. I guess the concern would still be: Superior obviously wants CUS's sodium chlorate production. If SPB has to divest it, it could be a deal breaker (?). I believe CUS/SPB management have done their homework on this, and that the deal will go through. As others have said, the debentures are trading like it will happen, and SPB keeps trending upwards. The CUS