Q: Looking for some guidance re considerations to consider in trading TCN at this point. What would your view be on the expected share price movement over the next 3 months. What factors might there be at play to improve the current stock price versus to lower it or finally the likelihood of it stagnating here. So do see it as a sell because current price likely as good as it gets, a hold because upside likely, or, if not too large a portfolio holding, a trim perhaps. Thank you for your views.
5i Research Answer:
With takeovers, we have always liked the idea of selling 33% on an initial bid, 33% 'later, and then tendeing the balance to the final offer. This captures a quick gain but leaves some on the table in case something else (another bid) happens. There is little premium left in the offer at current prices. As we noted this morning, we don't think the odds are high of a new offer, but they are more than 0%. We would expect the stock to more or less flatline in the interim. There might be some concern about regulatory approval, but there are no 10%+ shareholders at this time to cause problems. We think selling half now, rather than a third, is likely the best move.