OM Group: Another Weasel-Like Deal Where Public Shareholders Are Sold-Out

OM Group: Another Weasel-Like Deal Where Public Shareholders Are Sold-Out by Cove Street Capital

The topic for today is the deal announcement on May 31^st that the OM Group decided to sell itself to the private equity firm Apollo Group for $34 a share. We own approximately 1.5% of the shares outstanding at an average cost of roughly $28 purchased within the last year, so the transaction beats a sharp stick in the eye…but not by much. Here is what we find offensive:

1. The basic premise of any sale of a public company should be: is the upfront premium reasonably equal to or does it exceed the present value of the operating plan? The answer here, as we will...
   

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