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Old 09-09-2005, 05:50 AM
squiffy squiffy is offline
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Join Date: Sep 2003
Posts: 816
Default Re: Good Deal or Bad Deal?

That seems like an unusually high percentage premium. I suppose there is some doubt about the deal going through. The stock was trading higher recently, so perhaps this suggests the deal may not go through as it may undercompensate the sellers.

Typically the buyer pays some premium to the market price. This is actually below the recent market prices of 6.50 or so. Very strange.

I don't know much about either stock. It's important to have confidence in the long term earnings potential of the target, in case the deal falls through and you have to hold onto it for awhile.

22 seems like a pretty high PE. The target only earned about 2 cents last quarter, down from 4 cents the prior year. Not very impressive.

But obviously, if the deal goes though, a great return.
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