Thursday, July 21, 2005

Hit #54

Guilford Pharmaceuticals (GLFD) agreed to by acquired by MGI Pharma (MOGN) for $3.75/share in a part-cash/part-stock offer.

I first bought a small number of Guilford last year at $5.15. And in May, I bought a much larger number at $2.53/share. I also bought some more at the same price for another portfolio I am managing. The average cost comes to around $2.77/share. Thus today's offer represents a premium of 36%.

This hit is made a bit sweeter since that entire second round of buying was from cash that I received from Oracle for my Retek shares (details here). I hope I can recycle takeover cash so effectively in the future!

MGI itself represents a takeover target down the road, and I will be holding onto the shares I get in this deal.

For Guilford this is the best thing, since it was close to running out of cash. MGI hopefully will be able to use its muscle to extract something out of Guilford's assets.

Previous hit - Correctional Services (#53)


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