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Strategies & Market Trends : Electronic Contract Manufacture (ECM) Sector -- Ignore unavailable to you. Want to Upgrade?

To: Larry Unger who wrote (1822)	10/7/1998 4:02:00 PM
From: kolo55	Respond to of 2542

Deal depends on SANM price just before the deal closes. ALRN shareholders get $13.635 worth of SANM stock if SANM shares are at $24. If I understand correctly, if SANM is below this at the close, the deal could be canceled. Some posts suggest that SANM has to drop below 23.50 at the close before the deal is canceled. This is the risk that is causing the spread in the conversion between ALRN and SANM, and explains partly why ALRN is trading only at 11 3/4 or so. SANM at 24 3/8 is close to the price where the deal could be canceled. Personally, I think the deal is beneficial for both companies, and I expect it will close, even if the terms must be modified somewhat. I can't see the deal unraveling. Even if ALRN shareholders get $1.00 less of SANM shares for each of their shares, this still seems to be the cheapest way to buy SANM shares right now. I haven't fully explored this, since I find FLEXF too attractive below 30 to buy SANM at this point. So do your own analysis. Here are the Motley Fool comments on this arbitrage: fnews.yahoo.com Paul

To: Larry Unger who wrote (1822)	10/7/1998 4:09:00 PM
From: rich evans	Read Replies (1) \| Respond to of 2542

This deal is going to close for sure IMO. So the minimum value of ALRN is 13.75. But by end of Nov when it closes I would expect SANM to be up enough to give a .45 conversion. Morgan Stanly is bullish on SANM and sees 1.45 this year and minimum of 1.87 for 1999. Accretive imputs from ALRN to be about 2 cents a quarter so could see close to 2.00 for SANM in 1999 or more depending on growth in revs. If JBL is any indication as to rev growth then this stock could do well and reach Morgan stanleys price target of 55. This would equal about 24 for ALRN based on conversion. So we could be looking at a double for us ALRN holders. But havving said all that who can predict anything in this market as to a stock price. This is/has been one tough year and the gurus are now saying 1999 will be tough also with more chaos. Oh well. as was posted to me on another thread: "We must easily await the tired." Rich