Sell Alert: Blancco’s out one way or another
30th August 2023 |
At the start of August, Blancco Technology Group received and accepted a takeover bid to take the company private at a price of 223GBp per share.
The company’s stock price then spiked to the takeover price and has consistently traded over the takeover price since the announcement.
In my experience, the only reason a stock would trade over a takeover price is in anticipation of a bidding war from another takeover consortium. But in this instance, I don’t see that being an outcome.
In fact, Blancco, via White Bidco (a vehicle of funds managed by US private equity firm Francisco Partners), announced today that it is counting 35,945,587 Blancco shares, representing approximately 47.47% of existing issued share capital, as approving the deal already. If it hits 90%, the deal will complete. Blancco is well on the way to getting all the approvals needed.
There’s still a lot of time to go until approval needs to be given. Until that time, we expect the stock won’t do anything other than trade around the offer price. As such, with the stock trading at 225GBp, the offer at 223GBp and another month still to go until approval is needed or not, we’re going to exit the stock, take the small profit and move on.
Action to take: SELL Blancco Technology Group (LSE:BLTG)
Entry price: 204p
Exit price: 225.12p
P/L: +10.35%
Sam Volkering
Co-editor, Small Cap Investigator
