Is this the LAST buyout offer for Triad (TRI)? Based on all of the old data, this is now toward the higher end of the band we gave on numerous occasions. Everyone knows that if Firm A sees Value at $50.00 and Firm B sees value at $52.00 (both theoretical) then firm A or someone else may actually still see value at even higher prices. We noted the buyout could come higher in early February, but the question was still by how much.
We originally noted that this made sense at $46.00 to $54.00 and shares are now at $52.00. We also noted that a buyout could come at a higher price, but the chance of a much higher premium wasn’t really considered. The options activity is not showing a classic signal of a higher bid, but we are usually the first to admit that anything is possible. The Community Health deal (CYH) values the company at $54.00, although that may be a tad less because of the 4% drop in CYH shares even though this is a cash deal.
We don’t want to play the guessing game here, but it is hard to not notice that the MAY $55 CALLS in Triad are only priced at $0.15. A $55.00 offer would only be just under 2% higher than the new cvash bid of $54 so it sure looks like the options traders are not bracing for a significantly higher bid. Father time will probably be both the judge and the jury here.
Jon C. Ogg
March 19, 2007
Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.
Top Gaining Stocks
Top Losing Stocks