There is no connection with the Bidder.
Instos sell for all sorts of reason.Locking in an accounting profit is not one of them. If they can switch to another stock with a better expected return, they will irrespective of whether it is in profit or loss.Brokerage costs are so low now, transaction costs hardly come into the calculation.
Hedge Funds can be long in the morning, short in the afternoon, and long again the next day, depending on market intelligence and trading activity (like charts).
Bidders are permitted to buy on market (but not above the offer price I think).But they don’t tend to for a very good reason in the case of SOAs (Scheme of Arrangements). The Bidder and related parties can’t vote, so if they owned 20%, someone else with say 20% would then have 25% (20/80) of the shares eligible to vote, making it harder to get to the 75% threshold.
Ringing around shareholders to get them to Vote FOR happens for all SOAs.I have seen many Schemes get through at over 99% and all shareholders were contacted by phone.Unless there is a second bidder, then I believe this will go through at $4.60.If there was genuine doubt, there would be more insto selling and the arb return would be a lot higher.There would be not enough passionate HC shareholders to handle the sell volume for a near $1b stock.
And if there is no second bidder, I would suggest that $4.60 is reasonable, as there would have been adequate time for a second bidder to emerge.Rival investment banks would have been presenting the idea to likely rival bidders.Oil and Gas prices are high now, but any bidder will look at prices over the next 10 years in the context of emerging renewable sources of energy like solar which are already very cost competitive.
At the end of the day, it is irrelevant where the share price has been in the past 10 years.The only thing that matters is the future cashflows SXY’s assets will produce.
