This is fascinating. I'd had Gander Mountain (GMTN) on my radar as a possible short. However, an extremely high level of insider ownership weighed against shorting it. Now I notice that they are going private.
Their mechanism is to kick out anyone who owns less than $150,000 worth of stock:
"Under the terms of the transaction, the board of directors approved a 1-for-30,000 reverse stock split of Company common stock. After the reverse stock split, any shareholder holding less than one share will receive a cash payment of $5.15 for each share held prior to the reverse split. The Company also announced that Gratco, LLC and Holiday Stationstores, Inc., have agreed to make an offer to purchase shares held by remaining shareholders following the going private transaction at the same price of $5.15 per share following effectiveness of the stock split."
Various law firms are concerned that the price is too low and allege that "the board breached their fiduciary duties given that Gander Mountain stock traded at $5.62 on August 31, 2009 and $6.39 on June 8, 2009."
Also, "Immediately following the reverse stock split, we will file a second amendment to our articles of incorporation to effect a 30,000-for-1 forward stock split. As a result, shareholders owning 30,000 or more shares of common stock at the time of the reverse split will retain their current numbers of shares of common stock without change and will not receive cash in connection with the transaction."
Unfortunately from an arb perspective, the share price right now is $5 which is not worth it for me to buy. It would be cool if it sunk to $4 sometime between now and the closing. I would definitely pick up 29,999 shares.