DFR--Nsom. Can only post public reply to your question below. While I think the acquisition would be positive, the stock actually popped when they announced they hadn't secured financing for it. I think the price was struck before financials began to tank and DFR can possibly renegotiate to buy at lower price with less dilution. Don't think market is counting on acquisition. In the near term price will be driven by whether earnings and cash flow will allow them to retain dividend at same (or close) level. If so, price could move to 12 very quickly and the annual dividend rate would still be over 10%. Not a China stock--but a compelling play with a high dividend underpinning value.
worthy--do you think DFR will complete their proposed acquisition?
I am asking because of a timing thing that might present an opportunity. DFR was about 16 before they announced trouble with the acquisition, dipped to 5, has climbed back to 9 and change. Interestingly, acquisition is scheduled to close or die by October 19, which coincidentally is the expiry date for October options. There are October 12.5s out there on DFR, which might present a nice return
**IF** the acquisition went through
and
**IF** the market valued DFR at something closer to 16 than 10 with that acquisition
Your thoughts?
Joe
AI
