Monday, July 05, 2010

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.

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