WW,
<< If we wanted to sell out, we would have pursued a cash deal, and we probably would have ended up with a different company,>>
My take on this is that Cowall specifically wanted this deal to be with COMS. A marriage with COMS is better than being the bastard step-child at CSCO/LU/ROK etc.
Let's think for a minute what might have happened with a different deal. We shareholders get $68/share. Game over. Lights out. Cowall moves to Florida and drinks pina coladas with Jimmy Buffet. Doesn't sound bad to me, but I doubt that's his style!
Now let's consider what would have happend to x2. With LU/ROK and maybe with CSCO, x2 is history. I bet Cowall's ego is tightly coupled with the success of USRX and x2 and doesn't want it euthanized.
As the deal stands now, Cowall is likely to be the biggest shareholder in the combined entity. He gets a lot of shares of a great company at bargain basement prices (as do current USRX shareholders). He can continue to guide the USRX part of the combined entity. That's a good deal.
Wall street has engaged in a lot of speculation regarding the deal. Most of the speculation asks what did Cowall know, why is COMS giving away their shares cheap, why now, etc. These are all excellent questions that we should all consider. However, these questions are pure speculation and the people asking them are not in a position to provide the answers. In fact, simply asking the questions is good enough for them.
The only people who can come up with definative answers to these questions are COMS and USRX management. The management of these companies have built them into multi-billion dollar enterprises. They know their industries infinitely better than the army of me-too wall-street analysts. Each company had an opportunity for due dilligence regarding the other and decided the merger was the best course.
Now as an investor I have choice. I must choose between wall-street analysts and COMS/USRX management. I think you would be better off flinging darts than following analysts. The mutual funds dumping their shares consistently underperform the market. On the other hand, COMS and USRX have proven management teams. They have built leading companies in their industries and delivered outstanding results to their long-term shareholders. I'm betting that COMS/USRX will continue to provide excellent value to shareholders in the long-term. As a shareholder in both companies, I'll vote for the deal.
Hassell |
