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Technology Stocks : Icon CMT Corp. (ICMT)
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To: cyberman who wrote (118)9/17/1998 12:48:00 PM
From: Toby Zidle  Read Replies (1) of 128
 
I like your interpretation of what the suit can do for ICMT. You call it a win/win situation. But I could envision it as a win/win/lose suit.

The /lose appendix arises from the following scenario:

The court agrees with the plaintiff and blocks the merger. QWST decides not to raise the ante. No other bidders come out of the woodwork. ICMT remains an independent company and the price collapses to its previous $7 level. Remember that much of the present $11+ comes from those who bought solely to capture the buyout premium. When the buyout goes away, those shareholders sell out.

This case is typical of almost any merger that falls apart. The target company's share price falls apart also. Remember that before the merger offer, ICMT was in a downtrend from $20. Why would a merger offer withdrawal reverse this trend?
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