Sold Portec Rail Systems

I closed out my Portec Rail Systems (Ticker: PRPX) risk arb play today at ~ $11.54 generating a 1.67% return (annualized gain of 24%). L.B. Foster (Ticker: FSTR) extended the tender offer for another 2 weeks, which was not a big surprise to those following the deal. This deal will likely close since L.B. Foster pretty much has the number of shares tendered to close (need 65% tendered and 64.41% has tendered) and will probably divest a unit to satisfy the anticompetitive concerns from the Department of Justice. I wanted to free up some cash to potentially play the Genzyme (Ticker: GENZ) + Sanofi Aventis (Ticker: SNY) deal.

Sold Hardinge

Not really doing much, but just keeping a close eye on the potential Genzyme (Ticker: GENZ) + Sanofi Aventis (Ticker: SNY) deal. I did get out of my Hardinge (Ticker: HDNG) position today at $8.51so it was basically break even (gain of 0.70%). It was a busted risk arb play so I can’t complain. Now back to Genzyme + Sanofi Aventis, it looks like Sanofi Aventis has set the count down timer and will make an official bid for Genzyme within 3 days. The risk arb players are all over this one…

Genzyme + ???

So there’s no doubt now that Genzyme (Ticker: GENZ) is in play. First there was the Sanofi-Aventis (Ticker: SNY) news last Friday and now there are reports that Glaxo SmithKline (Ticker: GSK) is eyeing Genzyme. Analysts have also speculated that Johnson & Johnson (Ticker: JNJ) may get into the mix. I originally thought that Genzyme would get taken out at ~ $70 to $80 by Sanofi-Aventis, but with other bidders emerging, the price just went up. I would not be surprised if Genzyme gets sold for $90 plus... It’s going to be interesting to see how this plays out. I’m holding tight to my Genzyme shares...

Hardinge + Romi = NO Deal

So the Hardinge play didn’t work out. Last Thursday, Romi walked away from the deal and Romi stock price settled back down in the ~ $8.00 level with a market cap of around ~ $90 million. The company has around $20 million in cash so any additional downside will be limited. The company will report Q2 earnings on August 6th so I’ll wait until their earnings report to decide what to do next. They better do something to make peace with their shareholders for walking away from the Romi deal.

Portec Rail Arb Play

Today, I initiated a position in Portec Rail Products (Ticker: PRPX) at $11.35. This company is being acquired by L.B. Foster Company (Ticker: FSTR) for $11.71. This deal is currently delayed due to a second request by the Department of Justice. The companies agreed with the DOJ to delay the closing of the deal after July 16th and a drop dead date to terminate the deal is August 31st. The tender offer expires on July 31st so we should know by then if the deal will close. The potential net gain from this deal is ~ 3% (~ 57% annualized return with a close by August 31 and ~ 54% annualized return with a closing date of August 1st).

A Small Yawn... Playing Hardinge

Just a quick blurb before I go back into hibernation... I initiated a position in Hardinge Inc (Ticker: HDNG) last week at $8.45. With half of Hardinge's shares already tendered to Romi, I can't see how Hardinge can ignore this action by shareholders. I'll be tendering my shares this week to Romi.

Here's a write up about this deal from thedeal.com:

Indústrias Romi SA extended its hostile tender offer for Hardinge Inc. to July 14 and backed off of "best and final" language for its bid.

Brazil's Romi has a $10 per share offer outstanding for the machine tool manufacturer that it threatened to pull in June if it did not receive enough support from shareholders, who then offered shares representing 48% of the company.

The offer is not subject to due diligence or financing and is conditioned on a minimum tender level of two-thirds of Hardinge shares. Hardinge also has a strong defensive position including a poison pill and a staggered board. Hardinge argues that a basis for talks should be a bid in line with book value, or about $13.30 per share.

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On a side note, I've learned never play a risk arb deal with ADR shares. I got hit with an ADR fee of $0.05 per share in the SkillSoft deal, which really diminished my returns in the deal.

Hibernation Time For Money Turtle

It's the dog days of summer and it's hibernation time for the Money Turtle. My postings will be a bit sporadic, but I'll be wide awake soon.