SumZero members Tice Brown (Snyder Brown Capital Management), Michael Kruger, CFA (MP&K Partners), and Michael Zapata (Sententia Capital Management) wish to highlight a situation risen from a recent tender offer made by HC2 Holding Company, controlled by Phil Falcone (previously of Harbinger Capital and currently of Harbinger Group Inc.) for Schuff International, Inc (SHFK:US). Schuff International is a name that has been written up by multiple members of the SumZero community in the past.
The exclusive supplement on the situation is available via the link below without SumZero's typical access requirements. In it, Zapata highlights the following about the SHFK situation:
"Our analysis indicates that Schuff holds considerable value beyond the current tender price offered. The HC2 tender price is for $31.50, only 1.6% above the previous day's close. Conservative valuations range from $57-101, considerably more than the current tender price.
We note that in HC2’s press release, they state their intention is to squeeze out remaining Schuff shareholders; that is, if HC2 collects 90% of shares outstanding in this tender offer, they will be able to force remaining shareholders out of the stock under Delaware Corporate Law. This may be avoided if shareholders refuse to tender at the currently offered, insufficient price.
We are pleased to present this report free with our compliments: