Home > Views > Blogs > Market Movers > ADS Takeover Hopes Collapse
EMAIL
PRINT
RSS
SHARE
TEXT SIZE:
SHARE
Send a copy to me

Separate multiple email addresses (max 20) with commas.

0/1500

Main
Jerome Kerviel, Prop Trader   What Hope for Sears?
Jan 28 2008 11:24AM EST

ADS Takeover Hopes Collapse

Busted merger-arb trade of the day is the acquisition of Alliance Data Systems by Blackstone. Blackstone agreed to pay $81.75 per share for ADS, but the market didn't believe it: on January 18, ADS shares were trading only at $52.82. And it turns out that the market was right. "Alliance Data Takeover May Collapse" is the Bloomberg headline; ADS shares are now at just $43.08 apiece.

Blackstone is blaming the OCC, of all entities, for scuppering the deal. Details are hard to come by - I don't quite understand why the OCC is involved at all, let alone demanding "extraordinary" requirements of Blackstone. But I certainly don't get the impression that Blackstone is particularly upset about this development. In any case, ADS is now trading significantly below the level at which it was valued before the takeover bid. Anybody buying it now is buying the intrinsic value, not some takeover hope.

Update: The problem turns out to be that ADS owns two banks.

See more in

Loading...

Add Your Comment

Required fields are marked with an asterisk (*)
Add a comment

Recent Blog Posts

Archive

Previous
Dec
2008
Next


Also in Portfolio.com
Most Read
Most Emailed
Recently Commented