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

To: jeffbas who wrote (7170)	5/17/1999 1:49:00 PM
From: cfimx	Read Replies (1) \| Respond to of 78464

with all due respect... >>As I pointed out earlier today, an acquisition for stock would have been less terrible. However, the big holder's interests would have been diluted significantly.<< I think you'll find that, if the buyer's shares are selling below its intrinsic value, as you imply here, that a cash purchase is MUCH more desirable and less dilutive than a stock deal. This is basic buffet here. (sorry to bring TAHT up on the value thread!). Also, I think you'll find that the best way to judge whether this was a good deal is NOT to look at these stocks from a "technical" view, for example, 3 x its low, 2 x its low, but rather from a fundamental view. to understand the dynamics, you have to understand both businesses, the assets being acquired, what those assets will earn for the acquirer, and the price paid for the assets. It doesn't really matter where the deal was done in relation to how "far off the lows" each stock is. Because one or both of them may have been misappraised by investors at that time. This is too simplistic an analysis for a merger. with all due respect...