Tuesday, September 16, 2008

New MANDA Position: Philadelphia Consolidated (PHLY)

On July 23rd, Japan-based Tokio Marine entered into a merger agreement with property and casualty insurer Philadelphia Consolidated (NASDAQ: PHLY). The $4.7 billion all-cash deal stipulates that Tokio Marine would acquire all outstanding shates of Philadelphia Consolidated for $61.50 per share and is subject to the usual shareholder and regulatory approval.

Phillie's stock has been recently trading in the $59-$60 range but took a tumble yesterday along with the rest of the insurers. As soon as the stock showed some signs of life earlier this morning, I picked some up at $57.02 for an expected return of almost 8%.

MANDA Updates:
Bluegreen (BXG) fell below my target sell of $9.00, but is currently trading above that. If it can stay above $9.00, I'll keep holding onto it.

Photon Dynamics (PHTN) gapped down today on no news and is now trading at preannouncement levels. Barring a fundamental change in the company, I don't see any reason to get rid of it. However, if it falls below $12, I might have a change of heart. It sure would be nice to know what's going on, though. I've checked a few of the more popular message boards and haven't seen anything. Huh.

M&A Activity:
None today.
Yesterday: Best Buy (BBY) will buy Napster (NAPS) in a $2.65 per share all-cash deal valued at $121 million. The deal is subject to the usual shareholder and regulatory approval and is expected to close in the fourth quarter of this year. Put this on your watch list and if it falls below a certain point, say $2.50 (6% return), then you might want to pick some after first doing due diligence on the possible cause of the drop. (The stock is trading right now at $2.53 and was trading as low as $2.48 (7% return).)

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