Q: Persistence Capital Partner proposes to take NBLY private at $ 18.5. But the share price still go down to around $15. Why ? Is it a good time to buy ? Thanks a million.
5i Research Answer:
With only one buyer (the controlling shareholders), a deal that has dragged on a long time, and a price reduction, investors are very skeptical that this deal is going to actually close, hence the discount. We see it as an OK arbitrage play, but have been wrong so far. If the deal collapses though, the strength in the underlying market may limit the damage on a failed deal. But, PCP needs to get this done, and any further delays will not help sentiment. We are OK holding it, but are more cautious based on recent events.