** GOOD JOB EVERYONE*** That was a really good press release ...Gallagher listened to all of us who called. He got Culp and Tanner's people to realize that it was in their best interest to do a little honest PR, and not only that, pay for the Press Release. Pretty good, huh...merger isn't even totally complete and they are paying for the release.
There is about a 45 page, 8K I am pouring over now, but upon talking to Gallagher today, it is good news all around. This company can certainly not be accused of over-hyping. The PR today is better since it contains specifics that people can grab onto. The share structure is still a little complicated but Tanner's Private shareholders got 17 million shares at $2.00 I believe. That's what I recall Gallagher saying a few days ago.
Please someone correct me if I am wrong.
Also the ROTIP's should be called in soon, at which point they should trade at maximum value. Tha is what Gallagher thinks anyway:
I believe that at some point in the next few days the ROTIP's will be trading well under par with the common, as the common, which is easier to understand, usually reacts first.
ROTI price x 2.7 (+ up to .40 dividend per P) = ROTIP price.
So tomorrow if ROTI = 50 cents on the bid then ROTIP should be at least 50 cents x 2.7 = 1.40 plus 10 cents minimum dividend = $1.50
When ROTI reaches $1.00 then ROTIP = $2.70 + .10 dividend = $2.80 (or close to that)
The P holders are paid a dividend if the company calls the shares due, as I recall, and also may carry an add'l 30 cent dividend I believe if purchased before a certain date.....mid June?
Anyway, the P's may be the play.
GO ROTI AND ROTIP.....
PS- look at this! even if the worst happens and the whole deal falls apart (something which has virtually no chance of happening, IMO), Harvest ends up as a franchisee of Tanners and gets 3 Tanners Restaurants with an option of 2 more. Gallagher said he is taking no chances. I like that. He seems saavy.
This one seems pretty safe to me and it is trading at almost pre-merger level with nearly $3,000,000 in profits assured.
I have been told that the average Tanner Restaurant has profits exceeding 150K per year. The newer larger ones which are established are doing closer to $250 per year in profits. Gallagher can confirm that or maybe some of you want to call Culp.
I hope a couple more people will call Gallagher and verify what I am saying. I would actually feel better. This deal is complicated, but I don't believe I have made any errors in DD. Gallagher and the Edgar filings pretty much answered everything.
Good Luck all.
Clyde Culp is the reason I feel so good about this stock and Gallagher has done us all a big favor to with his excellent work...thanks Bill!
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