Wednesday, July 22, 2009

It's over. It's finally over (dramatic voice). (RATE)

AlphaNinja - Rate-comparison company Bankrate (RATE) has agreed to be acquired for $28.50 by Apex Partners.
IMPORTANT -->> former CEO Peter Morse, who owns almost 4million shares, is likely part of the buyout group. Remember the risk you run with company stock concentrated in the hands of management. This guy thinks the company is worth more privately run rather than publicly, and he's running off with the company.

This stock has been the bain of existence for shortsellers for over half a decade, and I give the company credit for proving them wrong. People could NOT grasp the idea of Bankrate's portfolio of websites being a defensible operation -->> sadly for the short-sellers, Bankrate's capitulation (selling itself) may be the proof to their argument.

The stock is up 16% to 28.65 -->> above the offer price, as shorts get squeezed and others bet on the possibility of a higher offer. In a sign of the times, this is a BO(buyout) not an LBO (leveraged buyout), as no debt is being used.

"Under the terms of the agreement, Apax will commence a tender offer to acquire all of the outstanding common stock of Bankrate, for $28.50 per share in cash, followed by a merger to acquire all remaining outstanding Bankrate shares at the same price paid in the tender offer. The offer price represents a premium of 15.8% over yesterday's closing stock price and 18.2% over the average closing price for the previous ten trading days. The transaction is valued at approximately $571 million. Apax is providing 100% of the financing for the acquisition from its equity funds under management. Shareholders representing approximately 24% of Bankrate's outstanding shares have entered into support agreements with Apax in connection with the transaction."

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