Hi Scott,
fyi: I have always stayed away from hostile takeovers, but, while on vacation (a time to think I guess), I realized that these type of takeovers may be lucrative. Looking back at all the ones that I can remember recently: rio algoma, videotron, winspear, ulster petroleum, ranger, cambridge, air canada/canadian(?), etc, during the first day of being announced, the target company trades at an approx 3% discount to the offer (similar to friendly takeovers), and, to surge in price upto 20% when the target company later announces that the offer is hostile. I can't really think of any exception to this. The trick in this is to quickly determine when an offer is hostile. Some pointers in a press release might include: a request for a shareholders list, lack of director's endorsement, lockup, poison pill, and that the release is not a joint release. Recently rio algoma fit this profile. Unfortunately I was not liquid at the time and helplessly watched, sigh.
What are you following these days?
Leon |
