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Author Topic:   Bombardier discourages tender offer
jimh posted 02-05-2002 08:35 PM ET (US)   Profile for jimh   Send Email to jimh  
The Globe and Mail, a prominent Canadian newspaper reported that Bombardier Inc. yesterday urged shareholders to reject an unsolicited offer from private investment firm TRC Capital Corp. to purchase up to 20 million, or about 2 per cent, of its class B common shares. Bombardier said the so-called mini-tender offer of $13.50 a share is below the stock's Friday closing price of $15.09 on the Toronto Stock Exchange, and is not endorsed by Bombardier.

Could someone please explain how an offer to purchase shares at $1.50 below the current market price would be attractive to potential sellers of shares?

Dick posted 02-05-2002 09:37 PM ET (US)     Profile for Dick  Send Email to Dick     
I think that if I had Bombardier stock There is no way I would sell it. It should be a very good retirement package.
Bigshot posted 02-06-2002 10:10 AM ET (US)     Profile for Bigshot  Send Email to Bigshot     
I would not touch Bombardier stock, any boat company or any other canadian stock, just my opinion. especially for a long term hold. If you want to buy a boat stock, buy the crapiest boats made, they sell(ie:Brunswick).

There are many reasons why they offer lower, might not have been lower when they first proposed it, etc. If the stock was $10 and takeover rumors leaked, it could have easily bumped it to $15+.

lhg posted 02-06-2002 07:29 PM ET (US)     Profile for lhg    
Things have not been going so well for Bombardier. They just layed off about 4500 people, and the airplane business, commercial and private, is in the tank. And the Sea Doo jet ski/boat business is not great either, and J/E is still an unknown commodity. Don't know about their rail business. It could be that this offer is in anticipation of a stock drop, and that is the most they think the company is worth. It also gives a large stockholder, such as a mutual fund, and chance to sell large blocks without further driving down the price, if they start to see it moving south. Then there is the issue of the weak Canadian Dollar. Canadians would want to invest in US stocks to protect their assets, but Americans would not want to do the reverse until you saw the currency exchange rate improving. This tender offer is probably trying to pick off the market bottom.

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