In my view, being LONG ECX is a good trade to have on because I...

In my view, being LONG ECX is a good trade to have on because I would expect SGF to come back with a higher offer. It’s very rare to see the first offer be the last. SGF even made comments post the initial rejection which indicated that it wasn’t walking away - “SG Fleet believes industry consolidation is in the best interest of all shareholders and SG Fleet will continue to consider its options in that regard.”

After running a simple merger model, assuming zero synergies (which is very conservative), I get >40% EPS accretion for SGF. This is mainly because the deal is mostly cash and it was acquiring ECX on a cheap 9.4x FY20 PE.