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Strategies & Market Trends : LastShadow's Position Trading -- Ignore unavailable to you. Want to Upgrade?

To: Street Walker who wrote (1094)	10/10/1998 8:05:00 AM
From: Joe Copia	Read Replies (1) \| Respond to of 43080

Yes, PAMM is a buy-out target with strings attached: As previously stated, the pending transaction with Fremont General is subject to a number of conditions, including completion of satisfactory due diligence, negotiation of a satisfactory definitive agreement, receipt of a fairness opinion, receipt of approval of a majority of PAMM stockholders, regulatory approval and standard conditions such as lack of material adverse changes. As previously announced, the initial $6 per share price to be paid in cash to stockholders of PAMM upon closing will not be reduced unless the proceeds from a sale of the interest-only strip receivable held by PAMM are less than approximately 50% of the current book value of the receivable. The current book value of the receivable was approximately $147 million at Aug. 31, 1998. Therefore, if the net proceeds of the sale of the receivable are less than approximately $73 million, the aggregate $31.8 million total initial acquisition payments to all stockholders ($6 per share times approximately 5.3 million outstanding shares) would be reduced, and the reduction, if any, would be divided among all PAMM stockholders. The amount of the reduction in the $31.8 million aggregate payments would be equal to the difference between approximately $73 million and the net proceeds of the sale of the receivable. For the purpose of determining net proceeds, gross proceeds of the sale would be reduced only by direct selling costs, and not by the amount necessary to repay any borrowings on the receivable. The aggregate reduction, if any, would be divided among all PAMM stockholders. PAMM believes that, even using significantly more conservative assumptions than it uses to determine the book value of the receivable, the present value of the estimated future cash flows from the receivable is greater than $73 million. However, given the current uncertainty and illiquidity of the market for these assets, there can be no assurance of the price at which this receivable may be sold, or that it may be sold at all. I played it as a roller overnight Thurs. sold Friday and repurchased on dip. It seems like a "no-brainer" but if you are holding this stock watch out for those "caveats" Joe PTG&LI !!! allstocks.com