Let's put our heads together and ask: What is a fair value for this company? Then, instead of just yelling at IR we can tell them an alternative that would satisfy us, the shareholders.
If everyone who reads this board were to call up Cable Car and let them know that the current deal is unacceptable, and tell them what we are willing to accept, that could cause them to think some more. Right now I feel like the leader of my tribe has just voted to sell Manhattan Island (on which I live) for some glass beads. (2)
I'll throw out a couple of numbers off the top of my head:
Estimated average long-term growth rate over 5 years: 30%. (1)
Fair value of DRNK @ P/E of 30: $4.80/share.
Buyout premium of 32% for making me take a short-term capital gain instead of holding my shares: $4.80 * 1.32 = $6.33. Or, for giving me a stock I don't want (TRY) which I would have to sell. Same either way.
I would accept $6.33 in cash for my shares today, or an equivalent amount of TRY stock based on its value _the day of the exchange_, minus the dilution from issuing extra stock to buy DRNK.
What do others think? Of course one would like to say "I want $10 and nothing less", but given typical buyout premiums I think we should ask for at least $6, assuming we will actually get some intermediate amount that we would be happy (though not ecstatic) with.
Long and annoyed,
Steve
(1) The growth rate of 100% this quarter is actually a bit deceptive. Revenues only grew 40%, and their business is becoming less seasonal over time. OTOH, one can also argue that Stewart's is on the brink of a major breakthrough, which I can believe, and know that Triarc believes.
(2) As mentioned before, Triarc is run by shady businessmen. I would bet that the real deal involves sweet executive compensation deals for Cable Car -- enough so that they don't mind shareholders getting the short end of the stick. I also bet that the deal for Simpson, Rutter, et. al. isn't as sweet as they think it is. |
