Arbitrage: Emageon (EMAG)
By:
Jae Jun Sunday, January 18, 2009 10:33 PM
For those that have noticed my Twitter updates, a merger
that I have been looking into is Emageon (EMAG). The spread at the
closing date of Jan 16,2009 was 47% with a closing deadline of Feb 11,
2009. This leaves us 3 weeks to work with if the deal is sealed in time.
Basics Of The Merger
- Deal first announced on Oct 13, 2008 and worth $62m
- If the deal goes through, each share of EMAG will be converted to $2.85 cash
- Shareholder approval obtained and no other approvals required
- Financing is being handled by Stanford International Bank Limited(SIBL)
- Financing was cancelled at first on Dec 23 followed by a decision to continue.
- All debt buyout by Health Systems Solutions (HSS)
- SIBL holds over 20% ownership of HSS
Termination Details
The merger is at a stage where it is too late for the buyer to try
and terminate the deal, however, the deal is not bound by any harsh
conditions. The merger can be cancelled quite easily with neither party
having to pay a termination fee on a mutual written consent.
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