Hostile takeover LOTS
David Nguyen Ngo
[ Author was David Nguyen Ngo ]
[ Posted on 6 Jun 1995 15:37:20 GMT ]
***Just to satisfy my curiosity, how different is a hostile takeover from
a merger to a buyout to a tender offer. These terminologies are
confusing; if someone can please clear it up for me.
Does IBM's hostile bid suggests that the 60/sh is not definite
leading current buyers to bid the price beyond the offered. If the final
buyout price is greater than 60, either IBM will raise the price or some
other company may step in to bid also. Is this correct?
Is this situation similar to the viacom and paramount bidding
frenzy for blockbuster, where the price continues to go higher because
both want to buy it, but only one will prevail?
Last question: LOTS is still edging up higher, should current
shareholders hold a while longer or sell today. If they don't sell, what
will happen to their stocks assuming IBM is going to buy ALL the shares
of LOTS for 60/sh?
tra...@netmetro.com
(David Nguyen Ngo) wrote:
Hostile takeover is diffrent in that it is hostile, ie. the parties have
not agreed on the aquisition. By making the public 'tender offer' of $60
cash, IBM can gain control of Lotus and maybe replace its existing
management.
In a merger, companies usually join forces by exchanging common stock.
The $60 is not definite, you can come in and offer $69!!! This is like an
auction since the management of Lotus must accept whats best for its
shareholders, thus usually the highest bid.
There arises one problem, the bidders must align proof of financing for
their bid to be considered... remember Kerkorian's bid for Chrysler.
Yes LOTS is going higher... but only fractionally... IF YOU HAVE LOTS
SELL, why take a risk for pennies after such a rise.... I would always
sell at this point. It is very unlikely someone would make a much higher
bid.. On the other hand there is still a chance the deal does not go
through... and then LOTS would go back down to around $30 and that would
be rather sad. (ie. Intuit)
Trader
Gustavus Vasa
[Bout LOTS takeover]
I hope IBM calls off the whole deal, as there is no synergy between the
two companies, except that they are both losers, albeit IBM was heading
to 100 ...
Not to panic though, as sheer technical factors will push Big Screw back
to the mid 90's.
Also IBM has stated it will buy back it's stock below 70, so that's a floor.
They should have used their cash to buy back their stock.
To show you how good a deal $60 is for LOTS, some shareholders filed
suit to force Lotus to accept the deal (though it may have been a ploy
by the shareholder lawyers to get some settlement money from LOTS)
The Mad Russian
> To show you how good a deal $60 is for LOTS, some shareholders filed
> suit to force Lotus to accept the deal (though it may have been a ploy
> by the shareholder lawyers to get some settlement money from LOTS).
Now there's an interesting lawsuit !!
"Yes, your honor, I realize that I could have sold the stock on the open
market at $62, but I want to force Lotus to accept the $60/share offer
because I'm a dick, and I don't want anyone getting any more than $60 for
their shares. Also, could you force anyone who sold LOTS above $60, to
return the money to IBM. You see, I'm in this stock selection contest
with another schizo, and I picked IBM, and the less money they waste on
pursuing LOTS, the more IBM will be worth, and that will increase my
chances of winning this contest that nobody really cares about.
Who me? Well you can call me Jay, or you can call me Jester, or you can
call me James, or you can call me Vasa, or you can call me......well you
get the picture."
As usual, Gustavus (the Jester) has his head up his rear and got things
backwards once again.
In reality, I believe that the lawsuits were filed to force Lotus to
reject the deal. Most likely from the shareholders who bought LOTS when
it was up in the mid 80's.
Have a fun weekend, I know I will.
The Mad Russian
--
The opinions contained herein are my own, and may or may not reflect the
opinions of my employer.
Holland W. Olive
Lotus accepted, blowing away more of IBM's money, and leaving
less for the JESTER, by paying $64 per share, not the $60
original offer.
JJ Jester tries to justify his IBM pick screwing up
and can't hide the truth from readers, and particularly the
"MAD PACK" (Mad R and Mad V).. Jester will lose his picks
in the Three Stocks and You're Out.. BTW, IBM is down on
the LOTS play, JJ is down on the Japan Crash, and is
sliding off nowhere on his Fools' Gold pick.
Meanwhile, investors in MV3 are making nice gains. :)
Wayne