Rich, I don't know much, but I'm pretty sure that CPQ could not get DEC for $40. Here's several reasons why (in no particular order):
1) The stock is trading above this price - I don't see why DEC would be sold below the current market.
2) It would not be considered to be a fair offer, since DEC has traded higher than $53 in the past year, and more than $50 in the past 3 months. IMO, any takover attempt with a realistic chance of succeeding would have to be at a premium to the 52 week high. (i.e, $60 minimum)
3) Another bidder would come it above that price, If CPQ looked like it was going to steal the company with an opportunistic leveraged buyout at $40, someone else would make a slightly less opportunistic offer at say $45, or DEC could find a white knight, or someone else in the computer business could make a hostile bid. IMO, there are enough players in this very competitive industry to ensure that if DEC is put into play, the shareholders will have a couple of offers to consider.
5) DEC's earnings are recovering, and most investors would hold out for a higher price.
Nice try though,
Regards,
John Sladek. |
