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Good question.
Does anyone know Swedish law well enough to know if the minority squeeze-out buyout offer is binding? Is there anyway for GE or even the ARCAM board to backout of the deal?
If so does that mean they have to also divest the company? Lots of questions that feel like they need specialist Swedish investment advice ($$$)!
I emailed Victor this morning asking if he knew if the decision on a final redemption price had been made and if not what the deadline would be.
He replied and re-iterated that he "thinks" the price will be announced by year end and 60 days later we'll get our money. So no real change from what they've been saying since the beginning.
I've not had any info from my broker/custodian and no updates from Victor/Axel. I've tried to Google "GE final buyout price for ARCAM" in Swedish and the last info was a post on a Swedish forum back in June saying it would all be done probably in the Fall.
Don't know how much the turmoil at GE is affecting this, although you'd expect the CEO issues are sufficiently high above getting this deal completed!
Update: Victor confirmed non-Swedish holders will be eligible for interest which was stated as being 2% over base rate which is currently -ve 0.5% so approx 1.5%.
I’m also amazed this still trades and at a huge discount. I think it’s a good play but I’m exposed enough to ARCAM as I want to be so I wouldn’t buy any more shares.
To my fellow hanger-on-ers,
I emailed Axel (Victor) and received updated info:
1. GE is not looking for advance title so full arbitration processwill occur. Victor guesstimates sometime in the autumn and payment 60 days hence.
2. GE is proposing 345SEK price on January 11. Victor says they’re researching to see if the price should be more. Not sure what that means or how we’d be able influence that.
3. Apparently interest is payable but I’ve asked Victor if he knows whether non-Swedish shareholders are eligible.
Here’s the text of the full document Victor sent me:
To
the Minority Shareholders of Arcam Aktiebolag
INFORMATION REGARDING COMPULSORY ACQUISITION (SQUEEZE- OUT) OF SHARES IN ARCAM AKTIEBOLAG
As You have previously received notice of, GE Sweden Holdings AB (the “Majority Shareholder”) has requested compulsory acquisition of Your and all other minority shareholders' shares in Arcam Aktiebolag (the “Target Company”). The Swedish Companies Registration Office (Sw. Bolagsverket) has appointed me as a trustee for the minority shareholders. The trustee protects the rights of the minority shareholders during the compulsory acquisition (squeeze-out) process. Note that you do not need to take any action if you do not want to. You will eventually receive compensation for your shares, but it will take some time.
1. Background
The Majority Shareholder has previously announced a public takeover bid to the shareholders in the Target Company. For each share in the Target Company, the Majority Shareholder offered a cash consideration of SEK 285, which was subsequently increased to SEK 300.
The Majority Shareholder now claims to own more than 90 percent of all outstanding shares in the Target Company. When a shareholder owns more than 90 percent of all shares in a Swedish limited liability company, the shareholder has the right under the Swedish Companies Act to compulsorily acquire the remaining shares of the company. The Majority Shareholder initiated the compulsory acquisition process on 11 January 2018. The Target Company’s stock was delisted on 26 January 2018, and therefore the stock is no longer subject to any organized trade.
2. In general about compulsory acquisitions
Compulsory acquisition of the shares of minor shareholders is a normal procedure and occurs on almost all purchases of companies with many shareholders. The procedure of compulsory acquisition is handled as a dispute between, on the one hand, the Majority Shareholder and, on the other hand, the remaining minority shareholders in the Target Company.
The dispute is handled by an arbitral tribunal consisting of three impartial arbitrators. The first arbitrator is appointed by the Majority Shareholder. The
Göteborg, June 2018
Majority Shareholder has appointed Claes Zettermarck. The second arbitrator shall be appointed by the minority shareholders. If many minority shareholders are involved in the dispute it is, however, practically impossible for the minority to appoint a joint arbitrator. In such cases, the Swedish Companies Registration Office will appoint a trustee to represent the minority shareholders in the dispute. In the present case, the Swedish Companies Registration Office has appointed me as trustee. The first task of the trustee is to appoint a joint arbitrator for the minority shareholders. I have appointed Gustaf Sjöberg. The two arbitrators appointed by the Majority Shareholder and the trustee respectively will thereafter appoint the third arbitrator, who will also become the chairman of the arbitral tribunal. In this case, Hans Danelius has been appointed as chairman.
The arbitral tribunal shall first determine whether the Majority Shareholder is entitled to request compulsory acquisition of the remaining shares in the Target Company. Thereafter, the arbitral tribunal shall determine the so called redemption price, which the Majority Shareholder shall pay for each share plus interest thereon. The arbitral procedure is usually conducted entirely in writing.
The trustee shall also preserve the rights of the minority shareholders in the arbitral proceeding. The trustee represents all shareholders that do not choose to represent themselves before the arbitral tribunal. Therefore, a minority shareholder does not need to take any action in order to preserve its rights. However, a minority shareholder that wishes to represent himself before the arbitral tribunal may do so, but he must notify the chairman of the arbitral tribunal; Hans Danelius, Roslinvägen 33, 168 51 Bromma, Sweden, hans.danelius@telia.com. A certain time will be specified, within which such notification is to be made. The notification may also be made later but a shareholder who notifies later than the specified time will be bound by the claims and concessions that the trustee have made until then.
3. Redemption price
The redemption price may be determined in two different ways, either in accordance with the so called main rule or the so called specific rule.
The specific rule shall apply if the Majority Shareholder has acquired more than 90 percent of the shares in the Target Company through a public offer, which is not the case. When the specific rule shall applies, the redemption price shall correspond to the value of the public offer. It may be noted that, under special circumstances, the main rule can apply even if the Majority Shareholder has acquired more than 90 percent of the shares through a public offer.
The redemption price will thus be determined under the general rule. If the main rule applies, the redemption price shall correspond to the market value of the shares (the so called actual value). The market value of the shares may be determined by different methods, e.g. based on the stock price or on a valuation of the Target Company. If the share has been listed on a regulated market, the main rule entails that the stock price shall be used unless there are special reasons for not doing so. The value shall be determined as per 11 January 2018, when the Majority Shareholder requested compulsory acquisition.
2
The Majority Shareholder requests that the redemption price shall be determined to 345 SEK per share, equivalent to the stock price as of 11 January 2018.
Regardless of the method used to determine the redemption price, interest shall be added on the amount to in accordance with the below.
4. Interest
From the day of request for compulsory acquisition, 11 January 2018, interest shall be added to the redemption price. Interest is payable in accordance with 5 § of the Swedish Interest Act (Sw. Räntelagen), which corresponds to the Swedish Riksbank’s reference rate plus two percentage points. The reference rate is adjusted every six months based on the market rate of interest during the previous six months. Information regarding the reference rate is found on the Swedish Riksbank’s website: www.riksbanken.se.
5. Advance title and advance payment
If the arbitral tribunal initially determines that the Majority Shareholder is entitled to compulsory acquisition of the remaining shares in the Target Company, the Majority Shareholder may also, as stipulated in the Swedish Companies Act (Sw. Aktiebolagslagen), claim to obtain a so called advance title to the shares before the final arbitral award. In the present case, the Majority Shareholder has informed me that it will not claim advance title.
6. Final arbitral award
The arbitral procedure will be finalised when the arbitral tribunal renders an final arbitral award stating the determined redemption price. The final arbitral award may be appealed, but it is very uncommon. Appeal shall be made within 60 days from receipt of the arbitral award. For the minority shareholders who have not represented themselves the time-limit is counted from the day that the trustee received the arbitral award. An appeal is made by bringing the case to the Stockholm District Court.
7. Payment
The redemption price and the interest will be paid when the final arbitral award has gained legal force, which means 60 days from receipt by all parties in the dispute of the arbitral award, provided that no appeal is made.
The payment will usually be made through Euroclear Sweden, the Swedish Central Securities Depository. Euroclear Sweden will primarily make payment to the bank account connected to the securities account on which the shareholder’s shares in the Target Company are registered. For shareholders who do not have a securities account in a Swedish bank or a stockbroker, and/or in the absence of such registered account, payment may be made by the issuance of a bank cheque. In order to avoid incorrect payments, it could be a good idea for a minority shareholder to keep the securities account and bank account.
If Euroclear Sweden is unable to get in contact with a minority shareholder the payment shall be deposited with the County Administrative Board (Sw. Länsstyrelsen). The County Administrative Board will in turn pay the deposited amount to shareholder that can prove its shareholding.
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8. Legal costs
All costs for the arbitration, including compensation to the trustee, will be paid by the Majority Shareholder, unless the arbitral tribunal due to special reasons decides otherwise.
9. Time
Normally it takes about one year from initiation of the compulsory acquisition process until the final redemption price is settled. Depending on the complexity of the case it may take longer or shorter. If the final arbitral award is appealed the dispute may take considerably longer.
10. Further information
If you need further information regarding the compulsory acquisition you are welcome to contact me on the following address: Advokatfirman Lindahl KB, Box 11911, 404 39 Göteborg, telephone no. 03-799 10 00, e-mail: axel.weibull@lindahl.se. Since the compulsory acquisition involves many minority shareholders, I will unfortunately not always be available for information via telephone.
Best regards, Axel Weibull
4
Thanks.
What do you think of the ARK 3D Print Index ETF (ARKK)? Top 10 holdings:
Company Ticker Weight(%)
1 ORGANOVO HOLDINGS INC ONVO 7.36
2 HP INC HPQ UN 5.75
3 RENISHAW PLC RSW 5.70
4 3D SYSTEMS CORP DDD 5.68
5 PRODWAYS GROUP SA PWG 5.62
6 MGI DIGITAL GRAPHIC TECHNOLO ALMDG 5.53
7 STRATASYS LTD SSYS 5.17
8 SLM SOLUTIONS GROUP AG AM3D 5.16
9 EXONE CO/THE XONE 4.77
10 MICROSOFT CORP MSFT 3.80 ?!?
Thanks for posting your response from Fidelity. Makes me more confident that we'll get our money eventually.
I agree that AMAVF and its products has a great future especially under the GE umbrella. I think we'll have to agree to disagree on the valuation price we think GE has to pay us but you're right that there's huge potential here.
Do you think you'll try and track AMAVF by buying GE or would you rather invest in a different pure A-M stock?
I spoke to my broker - Vanguard (VG).
They sorta confirmed that the underlying holdings are in ARCM. As this is an ADS it was/is effectively the underlying foreign stock.
Now they way I understood it (as relied to me by the VG client rep from his corporate actions team), I'm the beneficial owner of AMAVF shares and that VG is the legal owner of the totality of all shares held by all VG clients at their US custodian. These have corresponding holdings at a Swedish custodian of the underlying ARCM stock.
When the buyout goes through, the Swedish custodian will be informed and they will in turn tell the US one, who will tell VG who will then apply to VG clients.
What does that mean for the arbitration process? My guess (and it is my own amateur opinion) is that we as ADS holders are invisible and therefore won't have any input or even right to input into the process BUT there should be no reason why we won't get our money eventually. The reason I think people are selling/buying is that the sellers don't want to tie up cash for this indeterminate length of time and the buyers are hedging that they'll get c. $12/share on top of the current AMAVF price when the buy out happens.
I might try and send all of the above to Victor but this feels like I'm asking people (including VG) to stray into "advice" and I doubt he'll confirm this 100% either way same way VG wouldn't confirm the above understanding 100%.
I did panic a little when I read your post and starting thinking "have I bought worthless OTC shares that don't actually link back to the underlying ARCM.ST stock!"
But then I quickly thought back a few months remembered that I did receive cash when I couldn't participate in the tender offer therefore somewhere, someone has a register that I own ARCM shares otherwise I would not have received the cash when I didn't take up the offer.
I will call Vanguard today and ask them to confirm who the custodian on my AMAVF shares is and confirm that they recognise those 1:1 to a ARCM.ST share.
I will also contact Victor and show him that and ask him to confirm that I will be part of the buyout process.
Unfortunately, most (90%) shareholders did accept either a buy out at a price of either 300 SEK or 345 SEK.
To be fair to Victor (Axels assistant who was the one who actually replied to me BTW), he was answering my question about whether there's a legal minimum which he says there isn't.
I also think that there is no such thing as a "squeeze out premium" precisely because the regulator and companies don't want minority shareholders holding up buy outs unreasonably (I am not suggesting that's the case here, I'm just stating that's what I think the intent of the squeeze out rules are).
I would be disappointed with an offer below 345 SEK as well but again Victor says they haven't gotten to the point in the arbitration process of deciding on a price. If we were to try and justify the buy out price should be higher then that would require actual evidence that ARCAM was worth more at the time of the buy out due to sales growth + assets that had been missed. I think that's an uphill battle.
Contacted Axel Weibull.
I emailed some questions and received the response shown below each question:
I am writing to you in your capacity as the designated trustee for minority shareholders in the squeeze out process that GE has initiated for all remaining shares.
I am a shareholder of ARCAM AB (STO: ARCM) through shares purchased in the US through over the counter asset (OTC: AMAVF). I held these shares at the announcement of the squeeze out and had a few questions I was hoping you could answer:
1). Are non-Swedish shareholders treated any differently during the process?
1. No.
2). I understand the process can take several months and even possibly 12+ months however I assume that GE must make an offer within a certain timeframe?
2. Yes, the process will take several months and likely about a year before the arbitration tribunal announces a final arbitral award. However, GE has informed us that GE will claim advance title (please refer to Section 5 of the letter). If GE makes such a claim, the minority shareholders will receive advance payment in approx. three months from now.
3). Is GE legally obliged to offer a minimum price? Either the price they paid to exceed 90% holdings (345 SEK) or the closing price on the day before delisting?
3. No. Neither we nor GE have presented any claim regarding the price per share yet. GE will likely claim a price per share between SEK 300 (takeover bid price) and SEK 345 (paid to certain minority shareholders to exceed 90%). We hope of course that we can claim SEK 345 (or more), but it is too early to say at this stage.
This is the first time I've ever had one of my investments be involved in a takeover where the primary exchange is foreign and I've bought shares OTC. Usually I deal with ADRs or indirect.
I frankly have no idea what is the status of the shares bought OTC after the stock was delisted in Stockholm. I would hope that the buyout applies to shareholders as of the final buy out date but what happens if the rules say they only have to buy shares from shareholders that were recorded as having them on the delisting date? Effectively what is someone buying/selling now on OTC in AMAVF?!? You're not buying shares in ARCAM - that doesn't exist anymore!
I'd be curious to know the answer but no idea how you'd find that out definitively - maybe speak to your custodian/broker if you've bought since the delisting?
I don't think they can use the US OTC price of the stock after delisting on the primary Stockholm exchange to drive the price they offer shareholders the buyout quoted in SEK.
I cannot imagine how they could genuinely offer less than the 345 SEK/share they paid Elliot that triggered the squeeze-out. I for one would look at my legal options in Sweden at that point.
Currency fluctuation is a risk for the individual investor to carry when they buy shares outside of their home currency. I would not expect any company or regulator to hedge that risk on my behalf.
I think that it's reasonable that there might be some payment that equates to interest on the cash between the date of the buyout announcement and payment date but given the Swedish central bank rate is currently -0.5%, I'd not be holding my breath for any actual cash!
I've not heard from Vanguard about a payment date or price so far. I emailed the Swedish Companies Registration Office (as per ARCAMs website) asking about the process and how I can contact the appointed trustee - I received a confused email saying they didn't hold shareholder data and I should contact the Swedish Tax Authority that does! I replied reiterating my questions were all about the buyout process which they should oversee. No response so far.
I also noticed on the ARCAM investor page that a trustee has been appointed. I guess next step is to email him: In general, Arcam and GE refer any questions from the minority shareholders to the trustee, Axel Weibull at Advokatfirman Lindahl.
Not sure there is a holdout option. As far as I can tell the Swedish squeeze-out process effectively has an arbitration process with a 3 person panel - one appointed by GE, one appointed by the regulator and 3rd agreed upon by the first two. GE will state their price which not unreasonably will be what they offered Elliot in December 345 SEK. Now, at some point shareholders will get to voice their opinion on the price to the panel and they'll weigh up the arguments and then decide on a price that everyone has to take.
I guess since I didn't sell when I had the chance, I was gambling that somehow the panel might decide a higher price (based on no evidence and a total long shot). In hindsight I've now locked in my money for some unknown amount of time which was not a smart move given my above justification.
It still amazes me how irrational I can be about investing after 20+ years of doing it!
So, with only a few days left till de-listing I'm hedging my position. I've entered limit orders to liquidate my holdings at $45. If I don't get any takers then I'll strap in for the mandatory buyout process which should be at least $42 and change.
I've enjoyed the posts on this board especially the more technical ones that tried to explain some of the more high level concepts in easier to understand terms.
Good luck to all.
Same here - this is all new to me. I'm going to hang on till the end (although I don't think we'll get more than 345 SEK - apologies for saying 245 SEK in some of my previous posts purely a typo not deliberate). I'm not in a rush to reinvest the proceeds as I have not yet found my next investment target.
Does this mean we either sell out before the 26th Or we would then end up in limbo until the squeeze out price is agreed upon by arbitrators which could take 2 months (or worse case even longer) to be settled?
I have further "evidence" that I can't imagine we'll get more than 245 SEK for our shares based on literature about Swedish takeover rules that I found online. Full document is available here (https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0ahUKEwid97rmutLYAhUKCsAKHeD-AHAQFggpMAA&url=https%3A%2F%2Fwww.ibanet.org%2FDocument%2FDefault.aspx%3FDocumentUid%3DC570BA4B-C9B4-4B43-8A93-8028C12084B1&usg=AOvVaw3Auq_f0QfJ8NH3F8uEdC4D) but here's the relevant snippet and the part about the equitable price is in bold effectively the price when the announcement was made is the price we can reasonably expect.
EQUITABLE PRICE
MAIN RULES
? The purchase price for a share shall be determined in such a manner that it corresponds to the
price for the share which might be expected upon a sale under normal circumstances.
? For a share which is not traded on a regulated market, the purchase price shall correspond to the
“real value” of the share or the estimated selling price. This means that the arbitral tribunal has to
establish the share’s actual or estimated market value which may be very complicated for shares
that are not traded.
? If the shares are traded on a regulated market the exchange price on the date when the squeezeout
was requested is presumed to represent the share’s market value. It is, however, possible to
deviate from the exchange price if there are special reasons, e.g that trading on the said date was
so limited that it cannot be deemed to represent the market value of the shares or where the
exchange price has been manipulated or affected by misleading information.
I agree with your sentiment and enthusiasm about the prospects of A-M and the potential of Arcam. But from share perspective I can’t see why GE would pay more than what Elliot received. Worse comes to worse and they go to the Swedish exhange arbitrator it would surprise me that the price would be much higher.
Although as I type the OTC stock has volume of 9k+ and price is down 5%! Something strange is definitely going on.
Like all long term investors I was sad to see that GE had managed to attain the 90% ownership mark which allows them to perform a forced buyout. Obviously the see huge potential for Arcam and want total control. Understandable but still unfortunate for those of us that wanted to ride along.
So I was prepared to wait for the compulsory purchase but have been amazed to see share activity both in the STO exchange and US OTC stock. I was fully expecting the price to stick at 245 SEK and roughly 41.50 USD (per exchange rate). I know volume is minimal but it’s certainly higher than average - what possible reason is there for this? I can’t imagine any reason why the buyout price wouldn’t be 245 SEK so any reason to buy shares above that?
Ouch! That commission is steep. I know every time I buy AMAVF shares Vanguard gets me for $50 international settlement plus the $7 Vanguard equity trading fee but $100 is really excessive.
At least you had the option of selling your rights although I'm not sure how your broker decided that they would allow you to sell them but not exercise them without being a QIB. Seems like they half thought through the implications and did the easiest choice.
To be honest I can't tell. On the transaction details there's no price marked and commission/charges is zero.
Did you sell your rights? Because mine was a tender after the expiration s maybe that's why you got $0.10 more?
So Vanguard have processed the tendering of my rights and look like they've been valued at $1.84. So 5 rights are worth $9.20 which if I buy at the current price ($36.50) could buy me approx 0.25 shares (depending on trading costs).
And I probably will use the cash to buy back.
I'm not an expert in Swedish securities law and I suspect that to truly get a real idea if something objectionable has occurred I'd have to invest in paying a Swedish lawyer to help me understand my rights. I've been a US citizen who lives outside of the US long enough to know that most countries just shrug their shoulders and go "eh, you're American, dealing with the US regulations and laws is just too much of a hassle - take your business elsewhere".
I called Vanguard and name-dropped Fidelity and told them that they allowed holders to sell their rights and was told that "sorry, you can't even make the decision to sell your rights again because you're not a QIB". They said that at the end of the subscription rights trading period that I'd get some cash amount per right. The $2 price that was showing is just a placeholder but I had done a rough calculation a week ago and thought it would be in the $1.60-1.80 range.
Ha ha. Your photoshopping almost fooled me on my cellphone screen!
I spoke to a colleague yesterday who I trust about corporate actions and he confirmed that not allowing US shareholders to participate is an investor protection rule due to US securities regulation. Investing in overseas stocks is risky for retail investors and since ARCAM have not gone through all the filings to register the new shares with the SEC, retail US investors won’t be able to participate. It’s not uncommon and is not (in my opinion) a dastardly plan by GE to squeeze out small US shareholders. They wanted a cheap and quick way of raising money and the small % of US holders that would not be able participate was not a consideration.
We’ll still get money for our rights and in fact I’ll be calling Vanguard back and insisting that since Fidelity allows their customers to sell their rights that I want the same service.
Prospectus says rights can be traded till Nov 7th, no?
Vanguard have also told me as a US shareholder that is not a QIB that I can't participate in the rights issue.
I tried to argue that since I held these no doubt in an omnibus account and that it's likely the custodian was a QIB that I should be able to get them to instruct on my shares to exercise my rights. They said they couldn't and that effectively I'd just have to wait till 9th November and take the cash value of the rights.
I'll have a chat with some colleagues but I suspect that US regulations have made it too onerous from either a tax or compliance perspective for this to be extended to US shareholders.
Unfortunately Corporate Actions are notorious for being wrongly applied in financial services. I would ignore what Schwab are suggesting. ARCAM have clearly stated that this rights offer is for every 5 shares held as of record date equals one subscription right which equals the right to buy one new share at 240 SEK.
My broker Vanguard have not informed me that there is over-subscription privilege on this rights issue but that's not unheard of to allow existing shareholders to pickup rights that other shareholders decline. But be aware that these rights are priced at $2.006/held share (according to Vanguard) so if you did want to buy beyond your entitlement of shares that would be for each new share cost = (5 x $2.006 + price of new share 240 SEK).
GE or any other existing shareholder can't buy more than their subscription entitlement before each shareholder has made a decision on their individual holdings. And remember since this is a 5 to 1 issue all of us holding odd lots will have to sell those rights and if someone buys enough of those then they could accumulate more shares. But given the small non-GE held shares that won't be much.
Again, I agree with other posters here that GE does want to own 100% but as long as Elliot are holding 10% there's no way that they could possibly do so without paying us fair market value because of the activist way Elliot operates and their deep pockets and past track record of litigation. Just my 2 cents. Not intended as investment advice either way.
I agree with ledudes interpretation that each shareholder can only elect to buy 1 additional share for each 5 shares held on record date.
I would also expect the share price to settle in something like(5x current price + 240 SEK)/6. Which I guesstimate as approx 315 SEK or 38.33 USD.
Only low volume but price is up 3% in Stockholm.
Any ideas why? I was expecting a fairly long period of stagnation or is this just now a consequence of a 20% float stock?
Most brokerage firms use omnibus accounts at the TA. There are instances where they may be fully disclosed but in the US I'd imagine those are rare.
Therefore you'd need to know the brokerage firm for them to find you as the shareholder.
I only have generic information but the finra website has some good advice http://www.finra.org/investors/alerts/plan-transition-transfer-brokerage-account-assets-death
Best bet is that they get hold of his tax returns and look for holdings at brokers there or if he worked in a sensitive industry he may have had to declare his holdings and brokers. Otherwise look at his bank records for transfers in/out which will also maybe identify brokers. Then they can write to each one and they will then walk them through the deceased process. If they're lucky he would have had nominated beneficiaries on his accounts and the transfers once proper checks are done should be straightforward.
I am not an attorney nor a tax specialist nor a financial adviser. This information is my own personal amateur research.
I guess it boils to me being stubborn!
I like the promise and potential of metal A-M and think ARCAM could be huge. I think GE will accept less than 100% control but I also don't think they'll let investment driven parties (Elliot, Goldman) make them overpay for let's face it an unproven company (And I don't mean the machines don't work but in the sense can this technology plus underlying support really transform manufacturing in the short to medium term and is it ARCAM that will deliver it). GE are putting their money on them and I'd like to string along for the ride. Ultimately GE wants this to be successful and if it is us small shareholders will benefit. As I said previously if they continue to be listed ARCAM (not GE) will continue to have obligations to its shareholders - it is not a subsidiary. Of course GE could do all sorts of shady accounting/asset stripping/board manipulation but is that likely - I personally think that the risk is low in general and close to zero for GE.
Elliot and GS could of course negotiate to sell their shares directly to GE later on if the value goes up after the 6 month period but it doesn't make sense to me why they would.
I like looking for the simplest reason and itt's just possible that because GE is now backing ARCAM that's why those 2 are onboard - they may have been stalking the budding A-M space and they now think they know the likely winner? All idle speculation of course
in the scenario I described ARCAM remains a publicly listed company and will have to adhere to the rules and regulations if the Swedish exchange and regulator. It is not a subsidiary, the board has responsibility to ensure all shareholders benefit - yes a lot will now be driven by the needs of the largest shareholder.
Personally I don't see any reason to exit given my long term view.
Thanks for your thoughts.
Thanks for your reply.
I guess I am struggling to see how GE can burden a company they control with debt while extracting huge amounts of cash while keeping the share price low.
I also don't think a company like GE would stoop to underhand tactics to manipulate a stock that is best 0.5% of their total value. Even to screw vultures like Elliot.
Wow! I sound like I work for them.I don't!
Post-tender growth with GE as controlling interest in ARCAM
I've held ADR shares since 2014 and have some of my position still in the red and had bought more on the way down from the historical highs to now be overall in the black.
I've not tendered and do not plan on doing so but am curious why some people think if GE ends up with a controlling interest (50.1%-89.9%) that ARCAM will not call continue to grow? Short of nefarious accounting practices any growth and profits that ARCAM generates will reflect in the share price, yes there might be a constraint due to the limited float of shares but I'm can't see why there's doom and gloom about the underlying growth prospects for ARCAM.
It's in GEs best interests that ARCAM is successful. I guess my question is, what am I missing? Thanks.