Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
I tend to look at investments differently sometimes.
In this case, I was buying NEOG at a discount.
Although imperfect not knowing the final ratio, an odd-lot investor could have shorted six shares of NEOG.
I know someone who bought 99 shares of MMM on Monday for $126.25 and shorted 670 NEOG locking in $1,500 of profit.
Normally, I would have done “long, short and wait.” It’s what I should have done.
If my arithmetic is correct, you expect to make about $900 on this arbitrage play—assuming that you are able to sell the NEOG shares right away.
Do you have an opinion on #msg-169803130 (bottom)? TIA
Holders of 99 shares or less will not be subject to proration.
Please see my post from 8/05/22.
I purchased 99 shares.
It pays to seek out the fine print. Most tender/exchange offers have such a clause. It’s a great way to make a little “beer money”.
Normally, I would have shorted the other company. In this case, I was simply trying to buy SpinCo at a 7 percent discount.
In other words, the exchange offer is very likely oversubscribed and hence shares tendered will likely be filled on a low pro rata basis.
The adverse bankruptcy ruling last week makes the above even more likely.
The exchange offer includes only 2.8% of 3M's shares outstanding.+
3M Sets Final Exchange Ratio in Split-Off Exchange Offer in Connection with Neogen Transaction (8/29/22)
ST. PAUL, Minn., Aug. 29, 2022 /PRNewswire/ -- 3M (NYSE: MMM) announced today the final exchange ratio of 6.7713 for its split-off exchange offer to 3M stockholders to exchange their shares of 3M common stock for shares of common stock of Garden SpinCo Corporation ("SpinCo"). The exchange offer is being conducted in connection with the previously announced pending separation of 3M's food safety business and the subsequent merger of SpinCo, a subsidiary of 3M formed to hold the food safety business, with a subsidiary of Neogen Corporation ("Neogen").
For each share of 3M common stock that is validly tendered and accepted for exchange, 3M will deliver approximately 6.7713 shares of SpinCo common stock. Upon completion of the merger, each share of SpinCo common stock will be converted into the right to receive one share of Neogen common stock. As a result, 3M stockholders who tender shares of 3M common stock in the exchange offer will receive approximately 6.7713 shares of Neogen common stock (subject to the receipt of cash in lieu of fractional shares) for each share of 3M common stock accepted for exchange. Because the final exchange ratio is less than the upper limit, the upper limit is not in effect.
The exchange offer is scheduled to expire at 11:59 p.m., New York City time, on August 31, 2022, unless terminated or extended, and the closing of the merger is expected to occur promptly following the consummation of the exchange offer. 3M stockholders may tender or withdraw their shares of 3M common stock until the expiration of the exchange offer by following the procedures described in the exchange offer materials. The closing of the exchange offer and the merger remain subject to the satisfaction or waiver of customary closing conditions, as described in the exchange offer materials.
Based on the final exchange ratio, 3M currently expects to accept for exchange approximately 15,989,536 shares of 3M common stock if the exchange offer is fully subscribed. Because the exchange offer will be subject to proration if the exchange offer is oversubscribed, the number of shares of 3M common stock that 3M accepts in the exchange offer may be less than the number of shares validly tendered by 3M stockholders. If the exchange offer is consummated but not fully subscribed, 3M will distribute the remaining shares of SpinCo common stock on a pro rata basis to 3M stockholders as of 5:00 p.m. Eastern time on August 31, 2022 whose shares of 3M common stock remain outstanding after the completion of the exchange offer. Any 3M stockholder who validly tenders their shares and whose shares are accepted in the exchange offer will have waived and forfeited all of their rights to receive any shares of SpinCo common stock in that pro rata distribution.
For more information about the exchange offer, please contact the information agent, Georgeson LLC, at 1290 Avenue of the Americas, 9th Floor, New York, NY 10104 or at the telephone number 888-607-6511 (toll-free in the United States).
About 3M
At 3M, we apply science in collaborative ways to improve lives daily as our employees connect with customers all around the world. Learn more about 3M's creative solutions to the world's problems at www.3M.com or on Twitter @3M or @3MNews.
https://www.prnewswire.com/news-releases/3m-sets-final-exchange-ratio-in-split-off-exchange-offer-in-connection-with-neogen-transaction-301614127.html
I'm a long-retired lawyer and I never understood the theory of 3M's maneuvering against the earplug litigation. That gambit certainly wouldn't have worked years ago. Recently I dodged a similar situation when my kids' Monsanto holding was barely able to foist its incessant Roundup weed killer litigation onto Bayer of Germany. Thankfully Monsanto Corporation retained considerable value, but the company's brand (and balance sheet) was diminished by years in court. Monsanto, I believe, no long exists anywhere as a product nameplate.
With a market cap of $73 billion, 3M has considerable resources to carry on, but I'm guessing the company is precarious for growth. Several months ago my son asked my opinion of him buying 3M shares and I advised him to never invest based primarily on a showy payout [4.2%]. Since then, MMM is down another 15%, somewhat worse than the broad stock market. I'm holding 3M stock, but not adding
A recent article on 3M problems.
https://seekingalpha.com/article/4537364-3m-company-the-old-adage-of-not-buying-into-lawsuits
3M still_has_some shots-on-goal in_the earplug litigation…
As far as I know, 3M’s next step is to appeal the bankruptcy court’s decision in the Federal Circuit Court, where the case is heard by a 3-judge panel. I.e., 3M needs to convince 2 of the 3 Circuit Court judges to overturn the lower-court ruling.
If 3M fails to obtain a reversal of the lower-court ruling in the Circuit Court hearing, the company will presumably request an en banc rehearing of the case, where all 9 judges from the (regional) Federal Circuit Court hear the case. It takes 4 of the 9 judges to grant the request for an en banc rehearing and 5 of the 9 judges to prevail on the merits and overturn the lower-court ruling.
If 3M is unsuccessful in the Federal Circuit Court, the next step is to appeal to the USSC. At the USSC, it takes 4 of the 9 justices to grant certiorari and 5 of the 9 justices to prevail on the merits.
All told, I think 3M’s chances of overturning the lower-court ruling are 30-40%. The fact that there is a precedent for using the bankruptcy court to do what 3M is trying to do is helpful.
3M—(-9%)—fails to persuade Bankruptcy Court to accept earplug litigation:
https://finance.yahoo.com/news/3m-t-bankruptcy-halt-lawsuits-190012322.html
3M says it will appeal the ruling.
"3M Unit Defends Request to Shield Parent From Mass Earplug Lawsuits"
"Lawyers representing 3M Co. ’s bankrupt Aearo Technologies LLC subsidiary defended its request to a bankruptcy judge to extend a litigation stay to the parent company to resolve mass earplug lawsuits, saying such a move would be in line with other court rulings.
Aearo Technologies lawyer Chad Husnick on Wednesday said before Judge Jeffrey Graham of the U.S. Bankruptcy Court in Indianapolis that even though 3M itself didn’t file for bankruptcy, it also should be shielded from the 230,000 pending lawsuits that alleged 3M’s military earplugs were defective. Without the protection, Mr. Husnick said, mass lawsuits would continue against 3M in the U.S. District Court in Pensacola, Fla., and would complicate earplug unit Aearo’s restructuring."
https://www.wsj.com/articles/3m-unit-defends-request-to-shield-parent-from-mass-earplug-lawsuits-11660835021?siteid=yhoof2
3M—Federal judge allows transfer of earplug litigation to bankruptcy court:
https://www.wsj.com/articles/judge-knocks-3m-bankruptcy-strategy-for-military-earplug-lawsuits-11660578963
The bankruptcy court itself must still approve the transfer of jurisdiction, but the decision in the link above was a major hurdle that has now been overcome.
p.s. I can read only the first few sentences of the above article b/c it the full article is available only through a WSJ Pro subscription. Still, I can see enough of the article to understand what it all means.
Holders of 99 shares or less will not be subject to proration.
Website dedicated to 3M-NEOG exchange offer:
https://www.envisionreports.com/3MNEOGENEXCHANGE/2022/3mneogenexchangeaug4/index.html?voting=true
3M commences exchange offer for food-safety/NEOG spinoff:
https://finance.yahoo.com/news/3m-commences-split-off-exchange-164100919.html
3M reports 2Q22 results—sharply lowers 2022 guidance:
• Total sales growth: -2.5 to -0.5 percent vs. 1 to 4 percent prior
• Organic sales growth: 1.5 to 3.5 percent vs. 2 to 5 percent prior
• Foreign currency translation: -4 percent vs. -1 percent prior
• GAAP earnings per share: $7.32 to $7.82 vs. $9.89 to 10.39 prior
• Adjusted earnings per share: $10.30 to $10.80 vs. $10.75 to $11.25 prior
• Operating cash flow of $6.6 to $7.2 billion contributing to 90% to 100% adjusted free cash flow conversion
2Q22 PR:
https://investors.3m.com/news/news-details/2022/3M-Reports-Second-Quarter-2022-Results/default.aspx
CC slides:
https://s24.q4cdn.com/834031268/files/doc_financials/2022/q2/2Q-2022-Earnings-Slides.pdf
3M to spin-off healthcare business to 3M shareholders in late 2023:
https://investors.3m.com/news/news-details/2022/3M-Announces-Plans-to-Create-Long-Term-Value-Through-Spin-Off-of-Health-Care-Business/default.aspx
The spin-off will be tax-free for US shareholders. 3M will initially retain a 19.9% equity stake in the yet-unnamed healthcare company.
Note: The planned split-off/merger of 3M’s food-safety business with NEOG remains on track for a 2022 closing.
3M executes the “Texas two-step” to contain earplug liability:
https://investors.3m.com/news/news-details/2022/3M-Subsidiary-Aearo-Technologies-Takes-Action-to-Efficiently-and-Equitably-Resolve-Litigation-Related-to-Combat-Arms-Earplugs/default.aspx
"3M Has 64th Annual Dividend Increase Despite Headwinds And Legal Risk"
"Conclusion
Despite a not insignificant level of headwinds and the ever present legal risk, we still believe that due to the massive expanse of 3M's product portfolio and long history of delivering quality products, it is a good choice for a solid dividend yield on a blue-chip."
https://seekingalpha.com/article/4522882-3m-has-64th-annual-dividend-increase-despite-headwinds-and-legal-risk
3M settles with Belgium—will take $360M charge to 2Q22 earnings:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000066740/000006674022000056/mmm-20220706.htm
https://www.sec.gov/Archives/edgar/data/0000066740/000006674022000056/a76228kex-991.htm
3M updates Belgian manufacturing status and environmental-remediation program:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000066740/000006674022000052/mmm-20220610.htm
3M expects $300M revenue_hit_in_2Q22_from China’s COVID lockdowns:
https://finance.yahoo.com/news/3m-expects-300-million-revenue-152459655.html
3M is unusual among multinational firms in that almost all of what 3M sells in China it manufactures in China. The COVID lockdowns forced the temporary closure of some of 3M’s manufacturing sites in China.
This was stated on today’s Bernstein webcast.
3M’s earplug-litigation scorecard for “bellwether” cases—(updated):
• 6 wins by jury verdict
• 8 wins by summary dismissal
• 10 losses by jury verdict
• zero cases settled
3M ordered to pay $77.5M in earplug case—largest_award_ yet:
https://finance.yahoo.com/news/1-3m-ordered-pay-77-173614314.html
Oops! I was only off by one log, LOL.
No "Plastic bubble is a $175 million market in the U.S. and the vast majority of the product is not recycled. "
Cushion Lock—another innovative product from 3M:
https://finance.yahoo.com/news/scotch-brand-cushion-lock-protective-171000963.html
3M’s earplug-litigation scorecard for “bellwether” cases:
• 6 wins by jury verdict
• 8 wins by summary dismissal
• 8 losses by jury verdict
• zero cases settled
Two more bellwether cases are going to trial in May 2022. (Source: Today’s 1Q22 CC.)
1Q22 CC transcript of prepared remarks:
https://s24.q4cdn.com/834031268/files/doc_financials/2022/q1/Q1-2022-Transcript.pdf
3M 1Q22 results—2022 guidance:
2022 GAAP EPS guidance of $9.89-10.39 was lowered by $0.26 to account for previously announced charge related to PFAS environmental remediation in Belgium (#msg-168387784).
3M will continue to report both GAAP and non-GAAP earnings; however, starting with 1Q22 non-GAAP earnings will exclude litigation expenses (as well as one-off items such as the $0.26 charge for environmental remediation mentioned above). On this basis, 3M issued 2022 non-GAAP EPS guidance of $10.75-11.25, +6-11% YoY (vs 2021’s $10.12).
(Both GAAP and non-GAAP EPS guidance exclude the effect of the planned spinoff of the food-service business and its combination with NEOG.)
Abbreviated PR:
https://investors.3m.com/news/news-details/2022/3M-Reports-First-Quarter-2022-Results/default.aspx
Financial statements:
https://s24.q4cdn.com/834031268/files/doc_financials/2022/q1/Financial-Statements.pdf
CC slides:
https://s24.q4cdn.com/834031268/files/doc_financials/2022/q1/Slides.pdf
3M’s Belgium plant, where the Flemish government has halted PFAS production while environmental remediation is in progress, makes 80% of the worldwide supply of PFAS coolants used in semiconductor manufacturing. Ouch.
https://www.barrons.com/articles/chip-production-plant-shutdown-3m-pfas-51649361014
See #msg-168387784 for related info.
Some_legal_sages_think 3M will exploit the “Texas two-step”—contrary to my supposition in #msg-167972029:
https://finance.yahoo.com/news/j-j-victory-over-cancer-164854208.html
3M's CFO just said the NEOG transaction could be either a spin-off or a split-off. (Previously, the deal has been presented to investors as a spin-off.)
2022 GAAP-EPS guidance=$10.15-10.65…
PR:
https://finance.yahoo.com/news/3m-well-positioned-long-term-130000171.html
Investor Day CC slides:
https://investors.3m.com/files/doc_presentations/2022/02/14/new/Combined-Presentations-Final-(1).pdf
3M’s 10-K discussion of earplug lawsuits—(for archival purposes):
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000066740/000006674022000010/mmm-20211231.htm#i04254fc6fdb847859444e33430354842_184 (p.113-114)
"3M Increases Dividend [1 cent] for 64th Consecutive Year"
https://finance.yahoo.com/news/3m-increases-dividend-64th-consecutive-221500108.html
3M is approaching the earplug litigation the way MRK dealt with Vioxx in 2004—i.e. they plan to litigate each case rather than enter into an early class settlement.
3M hit by $110M verdict in earplug case:
https://finance.yahoo.com/news/1-3m-hit-110-million-001551502.html
The main story with 3M—It has been able to raise product prices enough to offset the price inflation from raw materials.
3M 4Q21 results—2021 non-GAAP_EPS_of $10.12—(+14% YoY)—slightly_above_prior_guidance of $9.70-10.10.
PR:
https://s24.q4cdn.com/834031268/files/doc_financials/2021/q4/Q4-2021-Earnings-Press-Release.pdf
CC slides:
https://s24.q4cdn.com/834031268/files/doc_financials/2021/q4/4Q-2021-Earnings-Presentation.pdf
Note: 3M will provide 2022 guidance at its Investor Day webcast on 2/14/21.
looking at some dividend payers here long term
NEOG to merge with 3M’s spun-off food-safety business in $9.3M deal:
https://www.sec.gov/Archives/edgar/data/0000066740/000119312521356172/d264913dex99.htm
The combination is structured as a Reverse Morris Trust that is non-taxable to 3M shareholders, who will receive shares of NEOG but no cash. The closing is expected in 3Q22.
3M 3Q21 PR and CC slides:
https://investors.3m.com/news/news-details/2021/3M-Reports-Third-Quarter-2021-Results/default.aspx
https://s24.q4cdn.com/834031268/files/doc_financials/2021/q3/3Q-2021-Earnings-Presentation.pdf
3M trimmed its 2021 GAAP EPS guidance to $9.70-9.90 (from the prior range of $9.70-10.10) due to supply-chain disruptions. OTOH, YoY organic sales growth is expected to be 8-9%, at the high end of the prior range of 6-9%.
MMM beats on revenues; beats on EPS
https://seekingalpha.com/news/3757905-3m-eps-beats-0_22-beats-on-revenue
Shitty place to work but stick options are good!
$181 hit. getting awfully close to the $170s
MMM down almost $3 today and we havent even begun to see a real market correction
i guess until the market stops sucking on Jerome Powell's C*ck, we wont see one bigger than 5%
Followers
|
47
|
Posters
|
|
Posts (Today)
|
0
|
Posts (Total)
|
666
|
Created
|
08/06/06
|
Type
|
Free
|
Moderators DewDiligence |
Volume | |
Day Range: | |
Bid Price | |
Ask Price | |
Last Trade Time: |