Bob,
I agree with some of your points. I'm surprised that the board has not been able to respond to the $108 question "how do you intend to increase shareholder value" posed by Putnum (btw, do you remember which show that was on? I believe CNBC this Tuesday). So the entrenched management is going to great lengths to keep their jobs. For example, attempting to change the bylaws so that 90% of the shareholders would have to vote for a change of the board!
Anyway, according to my understanding, the following possibilities exist for current CSC shareholders. The following might not be accurate - I'm not a lawyer or finance type. Do your own homework!!!:
1. Sell them in the open market for around 103. There are no uncertainties with this one - doesn't matter what happens afterwards.
2. Tender one's shares to the acquirer (in this case CA). That way, if the acquisitions happens, one would receive the final price. So, if CA ups the price to $114 (or some other value), the shareholder gets that final value. If a white knight comes along and wins the deal, the shareholder gets that value. However, if no acquisition happens, the shareholder is left with stock that probably worth what it was before this thing began.
3. Do nothing. Has similar outcomes as 2. with one big difference. In 2, the shareholder is increasing the chances of the acquisition happening, while in 3, they are reducing the chances by holding back their shares.
Also, check out this chart below for CA and CSC stock performance comparison.
techstocks.com
BTW, I have no holdings in CSC. I'm long CA (have been for almost 10 years, and have loved it).
- Brian. |
