Back on August 18, 2009, I wrote an article Telular And The Smartphone Revolution adding it to my "Smartphone Index". Yesterday they announced they were being bought out by Avista Capital Partners for $12.61 per share. So, after 19 years as a mostly hated public company (the kind I like) they will be no more, at least as an investment. It was at $2.95 a share when I put it into the index, so it will leave with a +327% gain - but not so fast.
The proposed buyout has been approved by the board of Telular but is now triggering a rash of lawsuits against Telular for accepting an offer considered by many analysts as too low. The analysts figure more like $18 would be fair to the shareholders. According to one of the band of lawyers, Powers Taylor LLP, “due to analyst’s estimates, the proposed sale price, the size of the deal and other factors, we believe this transaction may undervalue Telular’s stock. Our proposed lawsuit will seek to ensure that shareholders are receiving the highest share price for their shares.”
I don't know how this possible litigation will affect the buyout price, so I am going to leave it in the index for now. If it looks like the lawsuits will not prevail, I'll take the $12.61.
Tuesday, April 30, 2013
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