Scott,
You asked for some feedback:
The deal was done for the long term benefits to the shareholders, not the short term. I've said that all along, and Casey Cowell has so much as said it at the shareholders meeting. I think you acknowledged the long term scenario, but don't like the short term effect.
If one assumes that COMS is undervalued, then the 1.75 ratio is fair. This is slightly dated, but it shows some various scenarios of what will happen the the value of USRX shares as 3Com's share price recovers.
techstocks.com
In my view, there is a premium attached, it's just not a cash premium. I for one am much more comfortable receiving 1.75 shares of 3Com at $35 that I would be at 1.0 shares at $61.25. This way, I receive more shares with limited downside risk and superb appreciation potential, instead of fewer "higher valued" shares with more risk and less appreciation potential. I also feel that "long term" benefits in this case will be measured in months and years.
If COMS recovers to just $57.50 this year (which I expect easily will happen), we receive $100+ in value. That is an acceptable premium for the near term, at least to me. |
