CDW Goes to Private Equity (CDWC)

CDW Corp (CDWC) shares are trading up marginally after the company agreed to be acquired by Madison Dearborn Partners for roughly $7.3 Billion in cash.  The buyout price amounts to $87.75 per share in cash.  Shares are at $86.00 pre-market after closing at $83.11 last night.  The reason the shares are under the buyout price is because there are probably very few who would legitimately expect this offer to get a much higher rival bid.

Yesterday we noted that investors looking for a buyout should probably not expect too high of a premium from yesterday morning $83.00 prices.  The stock had experienced four rounds of significant gap-ups in recent months and were up more than 35%

The merger may look like a low premium compared to yesterday’s close, but when you consider the move seen yesterday and the last couple of months this looks like a very fair buyout price.  If there is a higher bid out there, it doesn’t look like Wall Street is betting too hard on it.

Jon C. Ogg
May 30, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.