Tuesday, May 10, 2005

On the wrong side of deals ... three times ... on the same day!

Note that I said wrong, not necessarily losing!

There were 3 (rumored) buyouts of interest yesterday. None of them were hits in the direct sense, but they all had something I could write about.

- Duke / Cinergy : Duke (DUK) bought Cinergy (CIN) at a small premium. This utility deal has a less than 100% chance of going through, after a recent court ruling against a similar utility merger. I do not own these stocks, but do own a few of AES (AES), Calpine (CPN) and Dynegy (DYN), all 3 of them being turnaround bets.

- Scansoft / Nuance: Scansoft (SSFT) bought Nuance (NUAN) at a hefty premium (> 40%). I have come close to buying Nuance shares a few times, but each time I was discouraged by the absence of insider buying. I do own Scansoft shares and I believe that this merger will make it a stronger player and ultimately a takeover target itself.

- Ameritrade / Etrade : Etrade (ET) is supposedly interested in buying Ameritrade (AMTD). I have seen both as takeover targets for a while, though I thought the chances of a merger were low. I was seeing Toronto Dominion as the likely buyer of Ameritrade, with a possible Etrade / Schwab combine following it. The market though seems to like the idea of a merger , with both stocks rising on the news.


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