There has been a real good discussion over at the original EMAG post and with just 1 week remaining until Feb 11, there has been no news (good or bad) from any party. The spread when I wrote the first post was at 47% with a price of $1.94.
After the initial post, I couldn’t find additional information on SIBL, Health Systems Solutions (HSSO.OB) and Emageon (EMAG) to counter my reasonings, so I bought at $1.94 on Jan 27. On Feb 3, I liquidated my Puget (PSD) position in order to take another bite at $2.40.
As you can see below, I’ve upped the probability of success to 80%. Why? If you look at slide 10 in the presentation (pdf file), HSSO’s future depends on acquiring EMAG.
[click image to enlarge]
EMAG will become the “platform” for further growth and strategic acquisitions. With SIBL holding a majority stake, my assumption is they are also backing HSSO. An event like last December shouldn’t occur again.
Odds of the Merger
Current Price: $2.47
Upside Potential: 15% / $2.85
Downside Potential: 50% / $1.23
Probability of Success: realistic: > 80%
Probability of Failure: realistic: < 20%
Time Frame: min: 7 days | max: until March 31, 2009 (highly unlikely at this point)
Disclosure: I hold EMAG at the time of writing.