Catalent stock just dropped 25%. There’s a mini-tender offer open from CRT at $42 (-ish) a share, that 25% fall means Catalent is now at $35 (-ish).
So, buy in the market, tender into the offer, profit!
Sadly, as I understand it – and would welcome correction – CRT is able to modify its offer. In fact, retrospectively moderate it. If market conditions change then they can not only drop the price on offer, they can drop the price they pay for stock already tendered into that offer.
It’s that last which seems to be a bit of a swizz to me. If you’re making tender offer then that should stand, no?
Gazumping / gazundering is perfectly normal in the housing market; why not in the stock market too?
It sounds the same as a bookie laying a horse at 100/1, then trying to pay out at 10/1 should it win, because the 100/1 was palpably wrong.
(The worst of it is that betting shops and online bookies do indeed have such a ‘palpable error rule’; maybe that’s where CRT got the idea from.)
I haven’t seen the offer document, but it may well say that the transaction will not proceed if, at the due date, the market price is below the mini-tender price.
Is there some reason why the government should interfere in the terms of this sort of contract?
Do they trade Nickel?