While the offer is still non-binding, several factors suggest that the spread might be too wide.
The company has received a takeover proposal from a larger peer, and the spread sits at levels you’d normally expect for a highly contested or wobbly deal. This one looks like neither. The board has said it intends to recommend the price, the buyer has told the market its diligence is substantially complete, the price looks good and shareholder approval is likely. Given who stands behind the buyer, there should be no financing risk either.
Once a definitive agreement lands, the spread should compress quickly.
Multiple other parties have reportedly shown interest in this company and have likely done substantial due diligence already too. So if the current offer fails, the company might just get acquired by another suitor, which adds some downside protection.
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