Forgent networks (NASDQ: ASUR) will be undergoing a going-private transaction. All holders of less then 750 shares will be cashed out at $0.34 per share, approx. 126% premium to today's price of $0.14. The transaction is still in it's preliminary stages and a definitive vote date has not yet been set. Probability of success is quite high as the stock will be forced to de-list, due to NASDAQ requirements, if the company is not voluntarily taken private. If the company is forced to de-list it will still have to incur expenses associated with regulatory reporting, whereas if the transaction is approved it will no longer have to file the required regulatory materials. Since the going private transaction is the more favourable of the alternatives, it can be expected to be approved.
SG
Disclosure: I own ASUR
Showing posts with label Going Private Transactions. Show all posts
Showing posts with label Going Private Transactions. Show all posts
Monday, April 6, 2009
Tuesday, February 17, 2009
KATY Industries ARBITRAGE OPPORTUNITY
Katy Industries (OTC:KATY), maker of cleaning products, filed a definitive proxy today proposing a vote of shareholders. The intent will be in effecting a reverse stock split in order to take the company private. All shareholders holding under 500 shares will be cashed out at $2.00 per share at the closure of the transaction. The equity is currently trading at $1.15 in the marketplace.
In order for the reverse split to go through it must be approved by the shareholders. The board of directors owns approximately 40% of the company and they will vote all their shares in favor of the transaction. Therefore, it can be hypothesized that approval is quite likely.
A purchase of the shares right now, if the transaction is completed will result in a 76% return over 1 month. This is equivalent to 766% annualized return. Since the mathematical probability of the transaction completing is so high, this is virtually a riskless proposition.
The goal here for the company is to reduce filing expenses associated with a public company, especially the Sarbanes-Oxley related auditing costs.
Read more about the transaction in their definitive proxy: Definitive Proxy Solicitation Materials - Going Private Transaction
The vote date is set at March 19th, 2009.
Disclosure: I own shares of NTEC.
SG
In order for the reverse split to go through it must be approved by the shareholders. The board of directors owns approximately 40% of the company and they will vote all their shares in favor of the transaction. Therefore, it can be hypothesized that approval is quite likely.
A purchase of the shares right now, if the transaction is completed will result in a 76% return over 1 month. This is equivalent to 766% annualized return. Since the mathematical probability of the transaction completing is so high, this is virtually a riskless proposition.
The goal here for the company is to reduce filing expenses associated with a public company, especially the Sarbanes-Oxley related auditing costs.
Read more about the transaction in their definitive proxy: Definitive Proxy Solicitation Materials - Going Private Transaction
The vote date is set at March 19th, 2009.
Disclosure: I own shares of NTEC.
SG
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