I've been thinking of using PRH as a cheaper entry into SLR.
Right now you can pick up 100k+ PRH for 26 cents, about a 20% discount to the current price of SLR. (well, if I had typed quicker!)
Pardon me if I screw up the math here:
First assume that PRH will trade less than the pre-merger price if things fall through (since they now need to raise capital presumable at discount), say 15 cents.
Then this implies about a 33% chance that the deal falls through AND there is no better offer. (based on the current PRH price being the sum of each possible outcome times the probability of each outcome occurring).
This seems a bit high since the directors of SLR and PRH are recommending the move. Perhaps the contractual arrangements that have been delaying the due diligence are causing some problems?
Or is the merger just being mis-priced?
PRH Price at posting:
2.3¢ Sentiment: None Disclosure: Held
