Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: The Perfect Hedge who wrote (13637)	3/4/1998 9:10:00 PM
From: Thean	Respond to of 95453

GD, can't help you much buddy. If the street thinks EVI pays too much for WII, EVI is doomed short term. Know your support and resistence points like Dave said. But since yours is all options, I don't know. Ask Steve.

To: The Perfect Hedge who wrote (13637)	3/4/1998 10:00:00 PM
From: 007	Respond to of 95453

FWIW, I think the EVI/WII deal is a good one. The management of EVI got where they are by putting deals like this together. They know what they are doing. It's not simply what you pay for the deal that matters, but it's the value added to your company in the end that matters. I also don't believe that this merger will be dilutive this year, and the press release stated that it will be accretive in '99. I could be easily wrong, but for the heck of it, I thought I'd take a look at how this year would be if the merger occurred on 1/1/98. Running some rough numbers based on earnings expectations for each company this year, and adding in the announced $40M in savings, I came up with about $325M in net income divided by 95M shares for a fiscal '98 eps estimate of $3.42 (excluding one-time fees). This would beat the first call estimate of $3.27. IMHO, the uncertainties created by the deal are offset by brighter long-term prospects, strategic synergies, and a reduction in business risk that this larger and more diversified EVI will enjoy. With the OSX already correcting, people kneejerked and said "they paid too much". If it were yesterday, when the OSX was breaking out, more people would have said "see how undervalued we are". Despite fears and possibly more selling in the short-term, in the long-term EVI will be valued for what it is worth as a business, not for what they paid for part of their operation. James PS TMAR is nicely anchored in the harbour, ready for OSX's next move, when it will race MDCO.