CHES - Blomberg interview from RB,
I'm Jim Kingslan and joining me on the Bloomberg Forum is Michael O'Shea. He is president of NJ based Chester Holdings. Chester Holdings has been extremely actively traded lately on NASDAQ BB. This stock has pretty much quadrupled in value, but even with that Chester Holdings shares are just above the .13 per share level. What's going on here? Well, during the past week the company announced that it is in talks to acquire a company with more than 3 billion in assets. Looking at this news release what is happening here? It looks as if your company stands to benefit if you're able to reach a final agreement here.
Yes, if we can reach a final agreement I think that it will take care of what we've been trying to do with Chester which is.... Chester is at this point a shell company. We are in the process of reorganizing and trying to bring ourselves into compliance with SEC requirements as far as being a fully reporting company. In essence this would allow the reverse merger of the one company into Chester which would give it a tremendous asset base.
Now in terms of valuation of Chester, 40 million shares outstanding trading at the level where it is at, how do we value the company then?
To be honest with you at this point the company has no operating businesses. So if in fact there is a value it's only in whatever the market sees it at, at the moment.
Right. What about once the reverse acquisition happens? Then what are we talking in terms of here?
Well, again, the letter of intent outlines that we are just negotiating at this point, but we have received audited financials from them and they have 3.79 billion in assets. Now most all of these holdings are non-performing. We would be using them for credit enhancement right now. But Chester would look to perhaps spin some off, put them into groups and try to make some of them income producing companies as well.
It sounds as if it's a little difficult now to assign some type of value or to correlate eventual transactions to where the shares might eventually trade at, that's a little premature.
Yes, I think it is premature. Again, we are just in the process of doing extensive due diligence on it, but it does look very promising as a way for Chester to get back into the market again.
Sir, now what happens if this doesn't work out? Does the stock return to its previous levels, in other words, it's just a shell company then?
Yes, that I need to be clear on if for some reason these transactions don't work. Chester would more than likely have some value in the fact that we do believe now we can meet all the SEC requirements, vis-a-vis, which means we can become fully reporting.
What's the time table of all of this? Is there a deadline in terms of your due diligence?
We are looking to enter the contract phase by the 15th of September. That is the date that both sides have set. |
