Ryan Morris makes his initial bid for INFU

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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

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