If Bank of America will give 0.1182 shares for each CFC share and BAC is trading at $38.5, why is CFC on $6.33
Best Answer
113 points
FeastOrFamine46 answered 2 years ago …
The news articles I have found about the buyout all say that BAC is buying CFC for .1882 BAC shares for each CFC share, not .1182. That would mean that CFC is actually currently valued underneath the BAC offer, which is currently valued at ($38.50)*.1882=$7.25 per share of CFC.
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2183 points
ChaosNantuko answered 2 years ago …
I think people now believe that CFC is a good takeover target, and based on all the foreign investment in the sector, they think that another group will place a higher bid on CFC, starting a bidding war. Something along those lines at least
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ChaosNantuko answered 2 years ago …
I was wrong on this one, FeastOrFamine46 has the correct answer. The CFC shares are valued UNDER their theoretical value of $7.25 per share because the deal could still fall through, and that risk is priced into the stock.
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