EZchip Semiconductor Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : EZchip Semiconductor

EZCH 25.49

0.0%

Feb 23 4:00 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: PaulAquino who wrote (2647)	1/4/2016 3:55:28 PM
From: Squeak22	4 Recommendations Recommended By longezch NapaDoc profstok Tartuffe Read Replies (1) of 2675

Paul, OK, here's some new discussion. One outcome that is not discussed here much is that MLNX may decide to sweeten the bid. Why would they consider paying more if no other suitors have emerged? Even if no other suitors emerge, there is (at least) a very good chance that the vote will be No because of well-documented questions about the fairness of the price as well as the bidding process. Just 25% of voting shareholders can block the acquisition so this is a realistic outcome, especially considering the failed vote in November (referring to withdrawal of the vote that was going to be No). Assuming that the failed vote would have been roughly equal to those voting against the re-election of the Board, the No vote probably would have been ~40%. But no one outside EZCH and MLNX will ever know for sure... If the No vote carries again in January, then earnings estimates for MNLX will drop because the EZCH acquisition is accretive to MLNX earnings. This means that the MLNX stock price would drop. There are ~47 million shares of MLNX outstanding. Let's say a 5 point drop is $335 million in MLNX market cap. It would benefit MLNX shareholders to offer an additional $10 cash to EZCH to prevent this drop (there are 30 million shares outstanding of EZCH; $10 per share would be an additional $300 million cost to MLNX). This revised offer would also be in the range of the Discounted Cash Flow analysis of EZCH's own investment banker. See my earlier post: Message 30379600 There are many scenarios such as MLNX offering its shares to pay for a sweetened offer. My point is that there is another reason to vote No that is compatible with the arguments of Yes proponents too.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next