Ann: Saputo Announces Improved and Simplified Off, page-9

re: Ann: Saputo Announces Improved and Simpli... I'm always up for a short discussion on this. Here are my thoughts.

Speaking to your side note:
"just a side note, if we talk normals, the company doing the takeover will normally drop share price during the takeover. This has been the opposite in the case here, so normal scenarios may not apply."

This is an important part of why BGA is rising during their bid on WCB.

With BGA's 18% control in WCB, they will see a rise in valuation as the bidder war takes WCB higher and higher. However, if BGA does win the Takeover war.. This intrinsic valuation of 18% ownership seen as an outside asset becomes an inhouse liability of increased cost with a buyout.
Once the bidding war is over, there is no outside pressure to maintain BGAs stock at it's current levels, thus a sell off will be pending.

I, unfortunately, don't share the same optimism with their bounce back during consolidation.

I'm a very caution trader, and when I trade I try to make the most out of a situation and leave very little to doubt.
I would play this a different way and take what's on the market off right now.. and then if I'm eager to maintain some sort of ownership within the milk industry.. I'd buy BGA or whomever at their support levels or their correct market valuation levels once everything has settled down.

Bidding wars exacerbate price valuations, once it's over.. everything drops no matter how much you wish it wouldn't.

But that's just me...


Happy trading, and good luck!
-Vrae