The value to SFE will depend on the terms and if this is a right offering or an IPO. The more I think about it, the more it sounds like a rights offering.
Probably will get some advance in SFE when we know the details -- price, #shares earmarked for SFE holders, etc. My estimate is if it's an IPO they price it from $12-18, with my best guess about $18 shr. With 14.5 shares currently outstanding, they will probably offer 3.5 mm new shares. On the other end, they might offer 5 mm new shares, but that would mean an est. offering price of $13, based on the news release which said they hoped to raise $65 mm. In any case, SFE holders would not get much value because ther's no room for a very good ratio. Even if 25% were reserved for SFE, that's only no more than 1.25 mm shares for the 35 million SFE shares. If you had 500 SFE shares (SFE said this would be a minimum for participating in IPOs) you'd get 18 shares.
If this is a true rights offering then things get much better. They would probably have a 10:1 ratio and price it at $5, which is a gift. Could easily pop to $25-30 on day 1. Even though 13.5 mm shares would be dilutive, they have relatively few shares out of USInteractive, so they can stand the dilution.
ICG doesn't appear to own any of USI, so there is still a decent chance it's a right offering. I kind of wonder why SFE only bought 15%. |
