Q: hello 5i:
please comment on the quarterly results and the takeover by Calibre. 0.60 sounds very cheap to me.
thanks
Paul L
please comment on the quarterly results and the takeover by Calibre. 0.60 sounds very cheap to me.
thanks
Paul L
5i Research Answer:
The value of the deal is 84c, but since it is an all-stock transaction the price will vary with the price of CXB shares. But CXB has also agreed to buy $40M in MOZ shares at 60c per share. This is essentially a way to 'block' other bids as CXB instantly becomes a large shareholder. The announced premium was 56% but since CXB shares fell it is now less. While investors may see it as a disappointment, in an all-stock deal they still get to participate in upside potential. Generally, investors afford higher valuations to larger companies in the sector, and the combined entity will be approaching $1B in market cap. We would consider it an OK, maybe not 'great' deal.