The estimated reading time for this post is 2 seconds
Note: Highlight to Tweet is enabled - Just highlight text to easily share the selected content to Twitter!
Last night, Meson Capital Partners (i.e. Ryan Morris) filed the anticipated offer to purchase InfuSystems. The offer was for a price per share of between $1.85 to $2.00 in cash. I view this as an initial offer, as the price is at the low end of the range I was expecting. If you want to read the letter, click here and read the short letter. From the language in the letter, it sounds like a purchase can happen quickly if the special committee and Meson Capital can agree upon a satisfactory price. $INFU closed the day yesterday at $1.55 per share providing an upside of ~20-30%.
The special committee has already filed a response to the official offer, which can be read here. The full 8-k is available for full reading. I agree with the committee that the purchase price underscores the value of INFU. The language in letter definitely is favorable to working with Morris to come to a satisfactory price, and even provides him exclusivity for more due diligence. Confirmation of financing commitments was also requested.
With the recent changes to the contracts of the executives providing them change of control compensation, I believe that management will agree to a price eventually and allow Morris to take InfuSystems private. However, I believe the price will be greater than $2.00 and think this was just an opening bid. Morris purchased a large chunk of shares at $2.25 and believe the agreed upon price will be close to $2.25 than $2.00, providing further upside potential.
I’m not quite sure how to interrupt today’s share price, which now sits at $1.75. I added to my current position today.
Disclosure: Long INFU
The content contained in this blog represents the opinions of Ray Bonneau and RayBonneau.com. Ray Bonneau or persons posting on RayBonneau.com may hold either long or short positions in securities of various companies discussed in the blog. The commentary in this blog in no way constitutes a solicitation of business or investment advice. Readers should do their own homework and research when making investment decisions. The blog is intended solely for the entertainment of the reader, and the author.
Ray Bonneau is a participant/publisher in certain affiliate programs, including Amazon's Associates Program. Ray Bonneau will earn a small commission when a link to an affiliate site is clicked and a purchase is made. Affiliate programs help Ray Bonneau earn money to pay for this blog. Readers do not pay any extra money when clicking and using affiliate links on RayBonneau.com
- Update on $INFU and Ryan Morris
- InfuSystem Holdings Q2 2013 Review