In one of the more ludicrous takeover bids of our time, Gandalf Technologies Inc yesterday launched its will they-won’t they takeover bid for Case Group Plc – but pitched the price it is offering at a 13% discount to the ruling market price, at which level it seems to have no hope of success. Case shares were trading at about 97 pence when Gandalf announced its offer of 320 pence cash and one new Gandalf share for every eight Case shares held – a package that values each Case at just 84 pence taking the value of Gandalf shares at UKP3.50 – $Can8.125. Gandalf holds 9.53% of Case and accompanies its offer with specious arguments that the price it is offering represents a 50% premium on the price at which it started buying last December – when the market was at its low point after Meltdown Monday, and 33% above the price before it declared a holding in March. It further argues that the Case price has been inflated artificially by speculation over its intentions towards the Watford company, and does not reflect the true value on the basis of the results anticipated from Case for the year to last March. The bid values Case at a mere UKP54m, about half the company’s annual sales. Case declared dismissively that it viewed the unsolicited and unwelcome bid as derisory and it firmly rejected it, adding Gandalf has nothing meaningful to contribute to Case in terms of its management, business or financial position. Gandalf, not flush with cash, has arranged a 10-year $Can72m facility at the Royal Bank of Canada to fund the cash part of the bid.
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