BKST Weak On Fears Merger Terms Could Change; Analysts Defend
Tweet
Share
E-mail
Brookstone Inc (NASDAQ: BKST) is trading significantly below the $20.50 per share merger proposal from OSIM International today on fears the deal could be called off or re-priced after Brookstone announced after the close that same-store sales decreased 10.8% for the eight weeks ended June 25, 2005. For quarter, the company said it expects same-store sales to drop 10-11%, and it expects to report a loss of $0.20-$0.22 per share.
Due to the increased risk the arbitrage spread has surged to +13.7%, meaning investors who bought at the current price ($18.90) would get a 13.7% return if the deal is consummated. But if the deal is called off additional pressure in the stock would be expected. There have been two sell-side analysts that have come out in defense of the stock today, suggesting to clients the deal will still go through and the weakness should be used as a buying chance.
Due to the increased risk the arbitrage spread has surged to +13.7%, meaning investors who bought at the current price ($18.90) would get a 13.7% return if the deal is consummated. But if the deal is called off additional pressure in the stock would be expected. There have been two sell-side analysts that have come out in defense of the stock today, suggesting to clients the deal will still go through and the weakness should be used as a buying chance.
You May Also Be Interested In
- PayPal tumbles as Advent, Stripe said to drop $50 bln pursuit
- Algonquin to sell 64% stake in Chilean water utility for $126.5M
- Wendy's stock plunges as Trian shelves take-private bid, Reuters reports
Create E-mail Alert Related Categories
Insiders' Blog, Mergers and Acquisitions, RumorsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
