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   Strategies & Market TrendsSpeculating in Takeover Targets


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To: richardred who wrote (5684)12/3/2019 1:18:48 PM
From: Fuzzy
1 Recommendation   of 6087
 
Cleveland-Cliffs to Buy AK Steel in $1.1 Billion Stock Swap >CLF AKS
6:15 am ET December 3, 2019 (Dow Jones) Print

By Colin Kellaher

Cleveland-Cliffs Inc. (CLF) Tuesday said it agreed to buy AK Steel Holding Corp. (AKS) in a stock swap valued at about $1.1 billion.

Cleveland-Cliffs said it will issue 0.4 shares, worth about $3.36 based on Monday's closing price of $8.41, for each AK Steel share.

The deal represents a roughly 16.3% premium to Monday's closing price of $2.89 for AK Steel, a West Chester, Ohio, steelmaker.

Cleveland-Cliffs said its shareholders will own about 68% of the combined company, while AK Steel shareholders will own about 32%.

The Cleveland iron-ore mining company said the transaction, which it expects to complete in the first half of 2020, implies a total enterprise value of about $3 billion for AK Steel.

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To: richardred who wrote (5684)12/3/2019 1:29:33 PM
From: robert b furman
   of 6087
 
Hi Rick,

Voortman cookies are sold at the cash register in Menards stores (like a Home Depot). Their Almond windmill cookies have been known to find their way in my plastic bag along with some PVC glue.

Hostess just kicked it up a notch in my mind. <smile>

Bob

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To: Fuzzy who wrote (5685)12/3/2019 1:35:21 PM
From: E_K_S
   of 6087
 
I was surprised at the small market cap of each company. CLF $2.3 Bln vs AKS $0.9Bln and then compare that to LULU at $29Bln or even TSLA at $60Bln. Even MOS which mines & processes Potash around the world w/ $7Bln market cap.

I wonder if US sees more consolidation in these old US manufacturers if/when we see the emergence of more manufacturing in the US. My thesis is in the next generation AI/Robot manufacturing, many of the old manufactures that come back to the US will reinvent themselves, consolidate/merge and run/operate this next generation manufacturing process.

The other huge innovation will be smart logistics/warehouse systems tied to the new smart manufacturing plant. Already seeing this in NWL (w/ their 18 month restructure).

The next result will be lots more mergers and consolidations and US manufactures reinvent their companies. CLF & AKS a straight forward merger. Others may not appear to be so obvious; NIKE & Footlocker and some other retailers along w/ super efficient make to order online distributed through Amazon. All made in the US by AI/Robots.

It took almost 20 years to move old school manufactures into China and I guess 10 years to see much of that come back reinvented to the US.

EKS

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To: robert b furman who wrote (5686)12/3/2019 1:43:46 PM
From: richardred
   of 6087
 
Hi Bob: I've seen their displays in some store before. I of coarse love their wafer cookies. This cookie picture is among my favorites I have with my morning coffee while doing some trading. It's great to dip into milk to. Owned by CPB now. I no longer own CPB. Synder Lance bought Stella Doro out of Bankruptcy.

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To: Fuzzy who wrote (5685)12/3/2019 1:48:33 PM
From: richardred
   of 6087
 
Interesting that you brought this Takeover up. I've added TMST TIMKENSTEEL CORPORATION to my watch list not to long ago.

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To: E_K_S who wrote (5687)12/3/2019 3:38:01 PM
From: Fuzzy
   of 6087
 
Yes CLF is way, way off of its all-time high...…..

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From: E_K_S12/4/2019 8:49:41 AM
   of 6087
 
Thoma Bravo acquiring Instructure in $2B deal
Dec. 4, 2019 8:46 AM ET|About: Instructure, Inc. (INST)|By: Brandy Betz, SA News Editor

Instructure (NYSE: INST) agrees to be acquired by PE firm Thoma Bravo for $47.60/share in cash.

The deal values INST at a $2B equity value.

The per share price represents an 18% premium to the three-month volume-weighted average price as of October 27, which was when the company announced the strategic review of its Bridge business.

CEO Dan Goldsmith and the current management team will continue to lead Instructure.

The agreement includes a 35-day go-shop period that expires on January 8.

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To: E_K_S who wrote (5691)12/4/2019 10:18:35 AM
From: Robert O
1 Recommendation   of 6087
 
It's informative to scan the entire M&A landscape for data points. This is a bit of an outlier that the pump up in share price since 'strategic alteratives' being looked at was first mentioned was overdone. The final price - if this is the final price - can sometimes not live up to expectations as here stock takes a 10% dump on deal 'done' news.

I would suggest that the larger the liquidity and market cap (often those two go together anyway) the more likely news has basically leaked out about true anticipated price within a tight range. If not on the dot. But for lesser knowns as here the guess was too high- or on a more cynical note those in know let it float up and dumped on way up to the top or shorted - either way chasers got burnt. Recall the Fitbit deal chasers after initial news leaked were rewarded by about 10% though on final deal price.

Dec 4 (Reuters) - Education software firm Instructure Inc (INST) said on Wednesday it would be bought by private equity investment firm Thoma Bravo in an all-cash deal for about $2 billion, giving into pressure from one of its shareholders pushing for a sale.

Stockholders of the company will receive $47.60 in cash per share, a discount of about 10% to Instructure's closing price of $52.96 on Tuesday.

Shares of the company were down about 10% at $47.85 in premarket trading.

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To: Robert O who wrote (5692)12/4/2019 11:03:45 AM
From: E_K_S
   of 6087
 
I noticed that. When I looked at their market cap and see they were still burning cash, that price was still good (even though it was a Buy Under).

Been looking at many of these 'Cloud' computing stocks and many/all demand huge price premiums. It's still amazing how a PE firm can pay that much for a company still w/ no earnings.

I see 2020 earnings estimate is still a loss w/ consensus showing a loss of $ 1.52/share.

It's a great concept 'cloud' based online education, especially w/ all the student debt, but not so sure INST has a durable 'moat' in their product/service.

Perhaps it an indication that many of the PE companies have tons of cash ready to deploy and it's more of cash looking for an investment.

Time will tell if this pans out.

EKS

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To: Fuzzy who wrote (5690)12/4/2019 1:36:23 PM
From: richardred
1 Recommendation   of 6087
 
RE-CLF -Nice rebound from yesterday on the initial merger news. BTW CLF is a Scion Capital/ Mike Burry stock pick. I've noticed TMST- TIMKENSTEEL CORPORATION is moving today to. IMO if this deal works out. I think it's possible a friendly deal of TMST could work out down the road?

P.S.
Cleveland-Cliffs Stock Slumped on the AK Steel News. Investors Just Might Be Wrong. -- Barrons.com
BY Dow Jones & Company, Inc.
— 8:23 AM ET 12/04/2019


7 Stocks Michael Burry ('The Big Short') Loves Michael Burry, depicted by Christian Bale in 2015's "The Big Short," and his top stock holdings.

7 Stocks Michael Burry ('The Big Short') Loves

Cleveland-Cliffs ( CLF)

After a steep fall in August, shares of this domestic iron ore miner are underperforming the market year-to-date, up only 8% as steel and iron ore prices have plummeted due to the potential for a global economic slowdown. Despite the share price weakness, Cleveland-Cliffs just announced a 20% dividend hike and a one-time special dividend of 4 cents per share. Cleveland-Cliffs shares now trade at a miniscule 5.2 forward earnings multiple. Scion holds 1.1 million shares of CLF stock worth about $11.7 million.

money.usnews.com

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