If there is no deal, the downside is probably limited to only 10% to 15%.
The company is running a strategic review to explore a sale. The founder and chairman is old. He previously resigned as CEO after running the company for 40 years but remains the largest shareholder. It is not hard to imagine that he is now looking to retire fully with a massive payday.
The timing also makes sense from the perspective of broader sector dynamics. A similar price-to-fundamentals mismatch has prompted M&A activity in the sector lately, with a number of peers acquired last year.
At this point, the process has been ongoing for some time already, so we might hear the outcome of the strategic review shortly.
One odd Latin American news outlet has been actively reporting positive rumors on this situation. It is not clear whether the information is real. However, both the rumored potential buyers and the bid prices seem believable and fit the whole context well.
Overall, this seems like a pretty interesting asymmetric bet.
This post is for paid subscribers, to continue reading please log in or sign up.