Stockman-
You may be correct in assessing that LU and Bay fit together better culturally. And, maybe LU is doing better in the marketplace than NT. Unfortunately(only if you believe that premise), LU did not offer to buy Bay; NT did. How could House et al fulfill their fidicuary responsibilities by turning down an offer that was within 10% of the 52 week high, nearly 60% above the price of Bay when the rumors of the merger hit and equal to the relationship of 52 week highs of both companies?
Would I have liked to see this deal done last October, when Bay was trading at $41? Yes, but then I do not think NT would have bellyed up to the bar with a $13+Billion offer then(eg, $60/share). Can't blame them for bottom fishing.
And you cannot blame Bay for the drop(and failure to predict the drop) of NT on this news. After all, it had been unaffected during the 3 weeks of speculation.
What we can blame Bay mgmt for is missing last quarter so badly after the mid-March conf. call. That hurt credibility badly and is one reason why people think NT overpaid, while we Bay shareholders think they underpaid. Lack of confidence in Bay hitting their number this quarter is a major factor. If the revs are there, DSO's are ok(no loading of the channel to make the number) and earnings are in line, we may see some improvement in NT's price(which helps Bay).
Be certain of this: without this merger, Bay would be trading at $23-24 right now. And there is no guarantee that LU would have taken over Bay in Oct at all, let alone for a better price.
Paul |
