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Non-Tech : Radica Games (RADA) -- Ignore unavailable to you. Want to Upgrade?

To: swedelo who wrote (6068)	9/19/1998 5:54:00 PM
From: mod	Read Replies (1) \| Respond to of 7111

I'm not Radica's legal counsel, but I do know something about the subject of companies going private. In general, management sets a price and gets a "fairness" letter from an investment bank stating that the price is fair to the public shareholders. Since the investment bank usually gets a sizable fee for this brief two-page letter, they tend to testify that whatever management offers is "fair". The only real power shareholders have is that they can vote down the offer. However, this rarely happens, since insider shares, combined with arb shares, are usually more then 50%. Arbs will buy much of the stock, after a deal is announced, at a discount to the offer price, and they want the deal to close, though sometimes they might try to get management to sweeten their offer a bit. In order to go private, Radica would have to borrow more than $100,000,000. I'm not sure there are many lenders of that amount to China-based toy companies these days, so I doubt they can go private. Dennis