Richard Pearson
Long/short equity, special situations, contrarian, short only

Evaluating The Camelot Buyout

Camelot Information Systems (NYSE:CIS) recently received a buyout offer from a group which is currently comprised of CEO Simon Ma, President Heidi Chou and CFITS subsidiary CEO Yuhui Wang. Mr. Ma and Ms. Chou are husband and wife. In addition, other members of senior management may opt to add their own participation to the transaction. The currently proposed buyout price is $1.85, which is over 10% above the last traded price.

Camelot is an interesting buyout trade because the current discount to the buyout price does not reflect the high level of certainty of a) the deal going through and b) it going through in a very brief period of time.

The deal looks highly likely because the...

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