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Author: mrchw Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1182  
Subject: SQA.A Date: 7/27/2007 11:01 AM
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Sequa is being acquired for $175 per share, expected to close in the 4th quarter. It's currently trading at $165.50. That's a 5.7% return in say 5 months, or 12-15% annualized...

Gabelli stated in Barron's this week he thinks there's a 15-20% chance of a higher offer coming. And he's put his money where his mouth is, he's bought over 70,000 shares between $169 and $173 since the deal was announced (that's $12 million worth for those of you keeping track at home).

Here's text from the press release:
The merger is subject to the approval of Sequa stockholders and customary
closing conditions and regulatory approvals, including expiration of the
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Under the terms of the merger agreement, Sequa may solicit acquisition
proposals from third parties until August 23, 2007. The transaction is
expected to close in the fourth quarter of 2007. The acquisition will be
financed through a combination of equity contributed by investment funds
affiliated with Carlyle and external debt financing provided by Lehman
Brothers, Citigroup and JP Morgan. The completion of the transaction is not
contingent upon Carlyle obtaining financing.



54% of the voting rights are owned by the estate of Norm Alexander, who passed away in April of this year, and Gabelli owns 30% (not 100% sure on this based on the dual structure, I think it's 30$ of the company, not voting), so I think it's a no brainer that the deal gets approved. Financing is guaranteed by banks, so there is no worry about not being able to obtain financing. The only problem is if Carlyle decides to walk for some reason, which I'm not sure why they would. But even if they do, it's only a matter of time before someone eventually buys this company.

Thoughts?
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