MoneyPenney,
You can ignore my last response -- here is the news on the merger which has the facts:
fast.quote.com
(here's some of the contents of above link)
Mauna Loa Macadamia Partners and C. Brewer Homes Sign Merger Agreement
PR Newswire, Thursday, December 18, 1997 at 23:06
WAILUKU, Hawaii, Dec. 18 /PRNewswire/ -- Mauna Loa Macadamia Partners, L.P. (NYSE:NUT) (Mauna Loa) and C. Brewer Homes, Inc. (NASDAQ:CBHI) (Homes)announced today that they have executed a definitive merger agreement. As previously announced, upon consummation of the merger, stockholders of Homes will receive .667 limited partnership units of Mauna Loa (subject to adjustment) for each share of common stock.
Now, here's my question, what is the "subject to adjustment" part? If
there is no adjustment, CBHI owners get 2 shares of NUT for every 3 they own. If there is no adjustment than CBHI should be currently worth 2 2/3 (as the merger is approaching soon). The merger looks pretty certain. However, what is this "subject to adjustment" -- is that only for an unforseen event, like CBHI striking oil (in Hawaii?) and the share price going up to $20 a share; or is it to cover a decline in CBHI price or to cover a change in NUT price?
Anyone care to speculate?
Also, is seems to me that even with the upcoming drought, that NUT won't get hurt too bad. The scarcity of macademia nuts should help increase the sale price and help make up for the lower supply that can be offered. Or am I naive? Also, certainly revenue and profits are not going to drop more than 20 to 30% -- are they? This still gives a pretty nice P/E -- and taking into account that this stock (NUT) is selling UNDER book value, it seems to me that WALL STREET has just overlooked NUT. (And what if their is no unusual weather, and they produce as well as they did this last quarter?)
The stock has seemed completely isolated from the market turbulence of the last few days. I know this is not a growth stock, or a tech stock or a speculation stock but even still a lot of boring non-tech stocks have had a rough time the last few days, whereas this one has held.
To me, this seems like a good steady, buy and hold (for 5 to 10 years) selection to me. I know that not many followers of the "$5 and under" thread think further into the future than 3 or 4 days, but I am certainly interested in hearing opinions on this as a long term investment.
- RDH. |
