Okay Doug, I am now thoroughly confused. After spending the better part of three hours looking at this deal I think you're right. The market is acting as if CST's only asset is EVI, and even there it isn't giving any weight (however small) to CST's business. It seems to be acting as if there are some liabilities around which we don't know of.
Here is the method I used. I added the market caps of CST and EVI. From that I subtracted the PV of the cash payments -- roughly $25MM, leaving a combined market cap of $2,964 MM yields a theoretical price of about $62 for EVI assuming 47,800,000 shares. But I don't think that number included the 3,897,462 shares owned by CST. Adding that number to the denominator yields 51,697,462 shares which gives $57.34 which makes sense for EVI. But if that is the proper price for EVI, then the price for CST should be approximately $42.65 plus about $4.80 for the PV of the cash payments (I used 10%). In other words, why isn't the price around $47.50. What am I missing?
There is more to this deal than meets the eye!
Totally confused,
TTFN,
CTC |
