Friday, November 17, 2006

Hit #130 (Reader's Digest)

Reader's Digest (RDA) is being bought by Ripplewood Holdings for $1.6 billion in a cash-deal. The offer, of $17/share, represents a gain of 28.2% over my average cost per share of $13.26.

I own only a small number of shares bought a couple of years ago. Given the absence of any positive news from the company or moves by the management, I hesitated to add to my position.

Growing up I had access to Reader's Digest's English editions from a number of countries - I can recall reading editions from US, UK, Canada, Australia, South Africa, New Zealand and India. It was a lot of fun comparing the cultural adjustments made in these editions. My attempts to get some spare cash by sending in entries for the various humor pages never succeeded! While I stand to gain from this takeover, the absolute gain is less than what I would get today if I were to send an entry, that gets accepted, for inclusion in Life in these states!

Another possible candidate, and a more worthy one than Reader's Digest, is Meredith Publications (MDP). The stock looks expensive right now, but at a much lower price, I will be looking to open a position.

Previous hit - RailAmerica (#129)


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