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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (41086)	1/17/2011 10:43:51 AM
From: Jurgis Bekepuris	Respond to of 78666

PTI - it may not be interesting to you, but let's explore this a bit more. 60+% acquisition is done deal. Founders are selling and the private holder is selling too. 20+% tender offer is active. I assume it was done only to satisfy Indian law about buying from minority shareholders when you acquire stake from majority shareholders. However, this raises a question. Once IGTE has 80+% of PTI what do they do next? There is no point of maintaining two stock listings, so will they close one? But then why the heck they are not acquiring 100% of PTI immediately? There are couple explanations: - They don't have enough financing to acquire 100%. This may be true and troubling, since IGTE is smaller and acquiring larger companies is very risky IMO. - They want to do some maneuver where they delist IGTE and refloat PTI, so they don't want to have 100% of PTI which would delist it. This also may be true, but also is not necessarily great for minority shareholders of PTI. In essence, at some point you become holder of combined IGTE/PTI, but with possible dilution/conversion/whatever attached. I looked at IGTE financial performance. It is weird: the revenue has been dropping while ROE has been rising for last 10 years. I am not sure I like that. So perhaps I should follow you and get out. Or maybe I'll just hold my small position to see what happens next. :) No intention to buy more though.