My investment club also owns ROTC, bought recently. I think 22.61 is a small premium for IHS to pay to get a company that will reduce its leverage by 10%, and be accretive in earnings immediately. This all has to be approved by shareholders of both companies, and won't occur until the fourth quarter of '97. I see institutions own +16 million shares of ROTC, so it seems this will be approved, or disapproved, by them. This ain't a done deal. Although it seems a great deal for IHS, giving them more diversity, expanding into the rural niche, and reducing their debt. My preliminary ssg on IHS puts it in the buy zone. S&P doesn't temper their data like Value Line does, so don't mix numbers. It could very well be that IHS bought companies (as they are wont to do!) in '95, why they showed a loss. Value line makes note of such occurances, but doesn't put them in the numbers. I'm waiting to see more opinion on this merger from analysts, initial reaction was surprisingly bad, but to me, on the surface, it seems like a good deal. ROTC's share price has been stuck in the water for a while, certainly not keeping up with it's great eps and revenue growth. I need IHS's annual reports for the last few years to really complete an analysis. Lets keep talking.
Wendy |
