Bobwins: RSGC has been drifting lower since they announced the merger with Strategy International, valued at $1.75 per share, on 12/17, now trading at a mere .72 after having rallied up to 1.05 on volume of 6 million shares the day of the announcement. Are you suspicious of the merger plan, or will it indeed be consumated around 3/1 as stated in the press release ? And if it falls through, do you think the Company can keep reporting EPS of .05 as they did in the latest quarter ? Below is an excerpt from the PR.
It is anticipated that Strategy International will offer cash and stock, which would result in a value to RS Group common stock holders of $1.75 per common share, to acquire RS Group's outstanding common stock (approximately 65 million shares), representing a 237 percent premium over the closing price of $0.52 on December 15, 2004. Strategy International, with input from RS Group, is in the process of determining the most effective method of achieving this acquisition. The transaction will not be conditioned upon Strategy International obtaining any financing.
"This acquisition provides Strategy with marketing and management resources that further enhance the Company's expansion. RS Group's proven product expertise and administrative capabilities will be an exceptional addition to the Strategy underwriting group," said Stephen Stonhill, President and CEO of Strategy International Insurance Group, Inc.
Strategy International expects the transaction to close on or about March 1, 2005, subject to the necessary shareholder and regulatory approvals. Strategy International estimates that the proposed transaction will be neutral to its 2004 earnings.
