Ed-
Let me try as well to explain the dynamics here. There is no "price" for Bay, because it is a stock swap, not a cash purchase. To hold your shares of Bay now(or buy more), you are concluding that NT is a good buy at about $53.
IF you believe the deal will not go thru, your best bet is to buy NT and short Bay, because NT only fell because NT investors did not like the price of Bay.
IF the deal does go thru, you might see NT fall alittle more because some investors who held on in the hope the deal would fail will finally sell out.
IF you believe the deal will go thru and longterm the combo will be one of the major players(as our disgruntled Stockman just said), then now is about as cheap as you are going to be in, so hold on to Bay.
All the above scenarios are subject to change if Bay does not deliver on est revs and earnings in mid-July. IF that happens, then all credibility will be lost, the NT naysayers will be reaffirmed in their belief that NT overpaid, and I think there is a stronger likelihood that a mass revolt could take place by the shareholders of both companies(inc. institutional holders). While this might leave the door open for LU in the Fall, the price they offer will probably be no better coming on such bad news. I see this as really the worst possible scenario.
In net, Bay must do the same thing as a potential acquiree as an independent company; they MUST hit their numbers this quarter.
Paul |
