Or, he might only pay 6 Cents given the collapse in admissions and warrants devalued from 7 Cents to 5 Cents in recent trade.
If you consider the 9 Cent value on the $23 Million against current OS and sliced off 1/3 due to admissions decline, the 6 cents does have some merit (IMO).
But, I'd honestly question a 50 Cent valuation at $330+ Million against the decline in the business and risks in forward monies from DSH and QAF (in phase-out or re-prioritized under Obamacare).
With only about 3.5% of the stock in the float for a buyout, I would suggest the insiders are making the decision on price and the 2x basis isn't a bad price (IMO). To fix the admissions problem, he may need to throw money at it once he fully owns it, so I'm not incline to believe he'd pay more than 7 Cents.
If you'll check, you'll see that Chaudhuri registered to buyout at about the same point where QAF money was finally approved (1st round back in December 2010). In other words, this buyout plan was based upon QAF money coming over the original 3 years, and extended in April due to the CMS payment delays.
I think Charles had it correct when he suggested cancelling the S-8 for issuance of employee options was a signal that a buyout was coming. That certainly could be a first step to start of final closure negotiations, i.e. final lock on shares.
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