05-23-2013, 12:09 PM
Something to think about:
These funds that own large numbers of IOC shares have a fiduciary responsibility to their shareholders. If an offer is in the best interest of their shareholders they will be required to vote to sell. Many of these funds have managers that are paid large bonuses based on performance. They would very much like to receive a large bonus.
Many of the smaller funds, having less than 1%, will vote to sell, depending on the offering price. The smaller funds have about 12% of the stock.
Many of the retail shareholders will vote to sell, depending on the offering price. How much do they have? Maybe 20%?
How easy will it be to get shareholder approval to sell? I think they only have to have a majority of the votes i.e. 50%+1.
If Chandler acquires 20% he will only need another 30% of the shareholders to vote with him. The top 3 or 4 shareholders could swing it or fewer if many of the retail shareholders and smaller funds vote to sell.
I think the shareholders will vote to approve the sale of the Company for any reasonable offer. What is a reasonable offer? It is anyone’s guess. Mine is about $150/sh. Do I think the Company is worth more than that? Of course. But what we are trying to determine here is at what price do we think the shareholders would be willing to sell the Company. I gave you my guess, what is your guess?
If Chandler wants to take over the Company or sell the Company to another entity that has the funds to bid $150/sh or more I do not think Chandler would have any problem finding another 30% of shareholders to vote with him.
Will the Company be sold for as little as $150/share? Probably not. Will we have a short squeeze that will drive the share price higher? Probably. Will that make an acquiring Company have to bid higher? I would think so. Will we have a bidding war between two or more entities that would like to own IOC’s assets? I think it is likely. Would that drive the share price above $150/share. I believe it would.
Would the people who want to sell the company accept a higher price? I think they would like that.
These funds that own large numbers of IOC shares have a fiduciary responsibility to their shareholders. If an offer is in the best interest of their shareholders they will be required to vote to sell. Many of these funds have managers that are paid large bonuses based on performance. They would very much like to receive a large bonus.
Many of the smaller funds, having less than 1%, will vote to sell, depending on the offering price. The smaller funds have about 12% of the stock.
Many of the retail shareholders will vote to sell, depending on the offering price. How much do they have? Maybe 20%?
How easy will it be to get shareholder approval to sell? I think they only have to have a majority of the votes i.e. 50%+1.
If Chandler acquires 20% he will only need another 30% of the shareholders to vote with him. The top 3 or 4 shareholders could swing it or fewer if many of the retail shareholders and smaller funds vote to sell.
I think the shareholders will vote to approve the sale of the Company for any reasonable offer. What is a reasonable offer? It is anyone’s guess. Mine is about $150/sh. Do I think the Company is worth more than that? Of course. But what we are trying to determine here is at what price do we think the shareholders would be willing to sell the Company. I gave you my guess, what is your guess?
If Chandler wants to take over the Company or sell the Company to another entity that has the funds to bid $150/sh or more I do not think Chandler would have any problem finding another 30% of shareholders to vote with him.
Will the Company be sold for as little as $150/share? Probably not. Will we have a short squeeze that will drive the share price higher? Probably. Will that make an acquiring Company have to bid higher? I would think so. Will we have a bidding war between two or more entities that would like to own IOC’s assets? I think it is likely. Would that drive the share price above $150/share. I believe it would.
Would the people who want to sell the company accept a higher price? I think they would like that.