Betting on EMMS Merger Investing Arbitrage

-
Jae Jun of Old School Value has an interesting take on the whole EMMS merger investing arbitrage situation.

While he makes some valid points I disagree with some of them. First off let me disclose that I am still retaining my position in EMMS and have voted to tender the shares.

Should the tender not work, I'm not seeing much further downside in this stock as the activists could very well be getting Mr. Smulyan to offer a higher bid. It's clear that Jeff Smulyan is very willing to take the company private - the question is are we reading his hand correctly?

I believe that he is willing to pay more than the 2.40 if there is dissent from the activists. Of course this is merely speculation as we don't have a view of Mr. Smulyan's hand.

Only time will tell but the tender deadline of August 2 is quickly approaching. I'm holding my shares and will ride this one out. The potential further upside is potentially huge.

Disclosure: Author has a position in EMMS acquired at 2.19

Comments

asues said…
I'm long EMMS as well. Still some uncertainty with the common shareholder lawsuits as well.

Preferred shareholders seem to have substantial upside even at the current offering. Loeb of Third Point Capital only recently purchased his preferred - I think he's angling to boost the return.

Smulyan has tried before and I think he has a vested interest in seeing this transaction go through.

You can read my posts on the situation here:

http://www.valueuncovered.com/emms-going-private-transaction

http://www.valueuncovered.com/emmis-transaction-derailed-but-for-good
July 23, 2010 at 11:35 PM
Post a Comment

Popular posts from this blog

Fed up with Pigsback

-
I received the following in my mailbox today: Dear canadiandollars, We want to remind you of some changes that have taken place this week. Our 'Quiz Quest' promotion, where members could win daily or weekly PiggyPoints in our different Zones has now come to an end. The quizzes that are affected by this change are the Shop & Earn Quiz, Sports Quiz, Travel Quiz, Movie Quiz and the Quirky Quiz. Now that 'Quiz Quest' is over, we will no longer be awarding everyone PiggyPoints for getting the right answer. But don't worry; the quizzes aren't going away completely. You can still answer the quiz questions and be entered into a weekly draw to win 1,000 PiggyPoints for each quiz. This change was meant to take place as of Monday, January 28th, but due to a small problem with the website, you may have noticed over the weekend that you didn't get your PiggyPoints when you were supposed to. Please note that we will be crediting all members who completed quizzes over...
Read more

Monthly status update

-
Savings @ 4%: $35892.30 RRSP: $32444.70 Securities: $29414.58 MBNA Mastercard: $(12,500) @ 0% interest until September 2007 CitiBank Mastercard: $(9600) @ 0% interest until October 2007 I currently have a net worth of about 76K. I'm up about 5K since my last financial status update. Astute readers will notice that I have lowered my cash holdings, increased my RRSP contribution and also increased my securities holdings.
Read more

RRSP vs. saving for a home.

-
There have been a lot of discussions on various blogs lately about the merits of saving for a RRSP vs. paying down a mortgage. As someone that has plans to purchase a family home in about 4-5 years, my situation is slightly different since I don't have a mortgage yet. While the home buyers plan will allow one to withdraw up to 20,000 to put towards the downpayment of a home is nice, I don't think it is realistically enough for someone living in Toronto. A detached home in Toronto will cost at least 350K. With that in mind, I am trying to diligently save as much for a downpayment as possible. The ideal situation for me is to accumulate about 200K for a downpayment. I believe that this is very possible if I save about 20K a year and my rate of growth is at 6%. So for my case, I think it makes sense to keep as much of my money outside of my RRSP as possible for now. There are some that argue that I should do both - maximize my RRSP and use the remaining amount to put toward...
Read more