Marc or anyone else, do you know whether a company
taking over another can purchase shares on the open
market after it files its takeover plan with the SEC?
The specific example I am interested is Zilog which is
to be taken over by the a private fund, The Texas/
Pacific Group at $25. Although ZLG traded at $24.50
after the takeover was filed, it traded down recently
when it pre-warned that the current quarter's earnings
would be 6-8 cents instead of the expected 9. Friday,
it closed at $20.50. If the takeover goes through at
$25 this quarter as scheduled, 20% can be made
by buying now.
This seems like a "layup." However, it worries me
that the price has not closed back towards $25,
especially if TPG is allowed to purchase shares.
Every share purchased outside the agreement
below $25 would save TPG money. If they can purchase
shares and are not doing it, that implies that the takeoever
will not proceed, at least at $25. If TPG is precluded
from purchasing on the market, this situation
is hard to pass up, particular since the current $20.50
price is not far from the 52 week low and ZLG
buyers should not get hurt too badly even if the
deal falls through. |
