A Wooden Spoon?

From live takeover target to busted arb situation.

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Value Situations is NOT investment advice and the author is not an investment advisor.

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I recently added a smaller “Quick Sit” position to the Model Portfolio, on the grounds that there were sufficient “clues” in place to suggest it would be acquired by a PE buyer at an attractive premium to the then-share price, making it an attractive event-driven value play against a volatile and uncertain equity market backdrop.

Somewhat disappointingly, news broke on Monday that the deal had fallen over, with the PE bidder walking away from the deal for undisclosed reasons. The target’s stock dropped significantly following this news, and while the immediate read of this situation now might be that I got it wrong, on proper reflection I believe the stock continues to represent an attractive value situation.

Firstly, lets recap on the situation…