Current Price –$23
Offer Price - $25+ (expected)
Upside – 10%+ (expected)
Expiration Date - 13th of December, 2016
This is a very simple and straightforward idea.
IQNT entered into agreement to be acquired by GTCR at $23/share. The deal was signed on the 2nd of November and the shares have traded at or slightly below that level since. The acquisition agreement also included go-shop period:
“Under the terms of the agreement, for a period of 30 calendar days, Inteliquent may solicit alternative proposals from third parties. Inteliquent does not anticipate that it will disclose any developments with regard to this process unless and until the Inteliquent Board of Directors makes a decision with respect to a potential superior proposal.”
Right after the expiration of the go-shop period (2nd of December) the company disclosed the below statement which was buried in the proxy filling (no press release or anything like it).
“After the announcement of the transaction and the commencement of the “go shop” period, Company senior management and Perella Weinberg Partners, at the direction of the Board and the transaction committee, contacted or responded to inbound interest from 43 market participants about pursuing a strategic transaction with the Company, including 13 strategic buyers and 30 financial buyers.”
This is a stunningly high number of interested parties. And although most of them probably have shown only the initial interest, there is a chance that at least couple of those are seriously considering bidding for IQNT. My understanding of the proxy is that IQNT can still continue the discussions with the parties that have shown interest until 13th of Dec and after this date go-shop period will fully end.
If another bid emerges it will likely be at least 10% higher. If no other bid emerges, the shares will probably trade around $22.8-$22.9 (i.e. 0.5%-1% loss). Upside/downside ratio seems to be quite favorable.
The biggest risk here is that the IQNT/ GTCR transaction gets cancelled – pre-merger announcement shares were trading at $17. However, as my time-frame is couple of weeks only until it is fully evident whether there is another bid or no, the probability of deal getting cancelled in the meantime is very low.