Eric, with regard to your goodwill question, at today's depressed price of $9.94, there would not be any goodwill, or very little; however if the price of MTSN rises upward it becomes an issue again. The proforma calculated goodwill based on an imputed MTSN price at closing of $35.48. At June/July 2000, the net current assets less all debt of CFMT was $7.60 per share and $9.00 for STEAG. This is b4 fixed and other long-term assets which would increase these amounts. Assuming that the combined average per share amounts of CFMT and STEAG is $10 (based on the 4 million and 11.85 million, respective shares received)I believe that MTSN would only recognize goodwill equal to the share price of MTSN at closing (as defined) less $10 times 15.85 million shares. Another way of looking at it is to reduce the proforma goodwill by the difference in $35.48 less the actual closing price, times 15.85 million shares. At today's closing price of $9.9375, goodwill would be reduced by some $405 million.
As long as the sector remains out-of-favor and depressed, seems to me that there is a huge benefit to close at these lower prices. This of course assumes that the rest of the sector remains beaten-up and pricing among the group is all relative. What alternative does CFMT and STEAG have at this time? If stock is to be used versus cash, I can't believe anyone else could sweeten the deal much, under these conditions.
As I was reading the merger proposal, I noted that CFMT was in serious discussions with an "ALTERNATIVE PARTNER" when it was also talking to MTSN. Anyone know who this would have been?
Lastly, on a combined basis, the working capital less all debt works out to be approximately $8.30 per share.
Eddie |
