The trading waters are often muddy during a deal of this scope...

The trading waters are often muddy during a deal of this scope and complexity and we can only speculate as to why the current price is more than 10% below the deal issue price. Unless there is something specifically sinister going on which is unlikely given the details provided in recent releases by the company, the ‘volatility’ we are seeing is probably best regarded as ‘noise’ or less charitably, there may be some downward pressure being brought to bear by market participants in whose interest it is to have a lower share price right now. Interpret this as you will.

The key point however lies in the extent to which the transaction adds intrinsic value to the company as a whole on the one hand and the extent of any execution risk on the other. The latter is probably not insignificant given the size of the acquisition, integration risks, cost-outs, and cultural risks that are often part of deals like this. Only time will tell.

One other notion may lie in the mispricing of the acquisition in the first place. Interesting though how over $700m of wholesale money by implication does not think this is the case having invested at $3.50.

Bottom line, CEO Renato Mota now has to put his money where his mouth is and deliver!