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Todd Walker is the Executive Director and Chief Strategist at HedgeTracker, where he is responsible for overseeing research, analytics and business development. He has particular expertise in investments that are popular among elite hedge fund managers, shareholder activists and... More
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  • Arcadia urges Symyx’s Board to reject Accelrys merger 0 comments
    Jun 3, 2010 1:05 AM | about stocks: SMMX, ACCL

    Richard S. Rofe, the managing director of Arcadia Capital, spoke out against the proposed stock-for-stock merger transaction between Symyx Technologies and Accelrys Inc last week. Since the announcement of the transaction on April 5th, Symyx has reportedly received three all-cash acquisitions offers that valued the company’s shares at $6.00, $6.25, and $6.50. Offers that the Symyx's Board has claimed are "inadequate, from a financial point of view, considering the price offered in comparison to the terms of the proposed Merger with Accelrys and long-term value which the Merger could provide to Symyx stockholders, and Symyx valuation as a stand-alone company."

    Arcadia Capital Advisors LLC believes that the competing all-cash proposals were “brazenly” rejected by Symyx’s board and deserve to be more thoroughly reviewed in order to maximize shareholder value. In the hedge fund manager’s merger analysis, it uncovered the following in SEC’s filings:

    • Under the terms of the Merger, Symyx shareholders are slated to receive 0.7802 shares of “Accelrys common stock for each Symyx share. As of Tuesday, May 25, 2010, Accelrys common stock closed at $6.73 per share, which implies each share of Symyx, or the "merger-equivalent value," to be worth approximately $5.25 per share at the same contemplated exchange ratio.

    • This "merger-equivalent price" of $5.25 per share represents an 11% discount to the market closing price for SMMX on Tuesday, May 25 of $5.91 per share.

    • Further, the most recent all-cash offer of $6.50 per share rejected by the Symyx board as "inadequate" actually represents a substantial premium to the "merger-equivalent price" and current Symyx share price. This competitive offer represents a 24% premium to the "merger-equivalent" value of $5.25 per share and a 10% premium to the Symyx stock price of $5.91 at Tuesday's (5/25) market close.

    Arcadia reiterated its support for the all-cash offers, as Rofe commented, "As a long-term Symyx shareholder, we would be more comfortable with the certainty of cash now rather than be dependent upon the execution risk, integration risk, market risk, and other uncertainties in the current economic environment related to any expected long-term value of the Symyx-Accelrys combination."

    Disclosure: No Positions

    Stocks: SMMX, ACCL
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