Monster Worldwide (MWW) – Competing Bids – 9% upside (unlikely but possible)

Current Price – $3.4

Offer Price – $3.7

Upside – 9%

Expiration date – 28 October 2016

SEC Filling

 

I am travelling, so this is a very quick note.

Monster Worldwide is being acquired by Randstadt at $3.4, however activist investor MediaNews is opposing the transaction and yesterday said it will launch tender offer for 10% of outstanding shares at $3.7.

I expect that shareholders will tender into Randstadt’s offer and company will get acquired at $3.4 making the activist fight irrelevant. But there is always a small chance that shareholders will reject Randstadt’s offer, at which point the share price will likely shoot up at least in the short term in hopes of higher offer from Randstadt.

With shares currently trading at Randstadt’s acquisition price there is no downside risk. So the trade is to buy shares, agree to tender all at $3.4 and then wait for couple of days to see if shareholders approve the transaction. If Randstadt’s takeover is approved, this trade results in zero, if it is rejected a small gain is likely.

So a small chance of gaining something without risk.

 

For further info:

Randstadt’s tender offer (the deadline was extended till 28th of October)

MediaNews presentation

Monster Worldwide response to MediaNews activism.

 

There is always a risk that something completely unexpected happens, e.g. Randstadt walks away, tender is cancelled or Randstadt expresses no further interest in the company if tender is not approved by shareholders.

 

9 COMMENTS

      1. dt

        I think you are missing the whole point of the trade here. Randstadt is acquiring all of the company, so odd-lots do not matter here. If acquisition takes place, all shares will be acquired. But there is a small chance that shareholders will reject Randstadt’s offer in which case a higher offer is likely.

    1. dt

      One can play for this as well, but the main thing would be higher offer from Randstadt if shareholders do not approve the merger.
      Yesterday shares traded even at $3.33

    1. Xiang Wu

      What does the rejection mean ? How many shares does Randstadt need to acquire MWW ?

      1. dt

        My understanding is this rejection does not mean anything, merely expression of opinion. So non-news.
        More than 50% of shareholders need to tender for Randstadt to consummate acquisition.

  1. dt

    Randstadt’s tender was successful and MWW will be acquired for $3.4. Those that acquired below $3.4 (shares traded at $3.3 on Friday), made easy 2%. For me the return is zero.
    What is also interesting is that only slightly more than half of the shares were tendered, so acquisition passed by very narrow margin:

    “The Offer expired on October 28, 2016 at 12:00 midnight, New York City time. Broadridge Corporate Issuer Solutions, Inc., the depositary for the Offer, has advised that, as of the expiration of the Offer, a total of approximately 45,973,527 shares of Monster common stock have been validly tendered and not properly withdrawn pursuant to the Offer, representing approximately 51.5% of Monster’s outstanding shares (including shares of restricted stock and options). In addition, shares presented by notices of guaranteed delivery have been delivered with respect to 3,708,393 shares of Monster common stock that have not yet been validly tendered, representing approximately 4.15% of Monster’s outstanding shares”

    https://www.sec.gov/Archives/edgar/data/1020416/000119312516752325/d272634dex99a5k.htm

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