What happened
Continue Reading Below
Shares of General Cable Corporation (NYSE: BGC) jumped as much as 35.2% in trading on Monday after the company accepted a $3 billion buyout offer from Prysmian Group. Shares traded in a tight range during the day, and at 1:30 p.m. EST shares were up 35.1%.
So what
Prysmian agreed to pay $30 per share in cash, an 81% premium to July 14, 2017 when the company announced it was undertaking a strategic review. The deal has already been approved by both companies’ boards of directors, and Italian company Prysmian has proposed financing some of the transaction through an equity offering.
The acquisition isn’t expected to close until the third quarter of 2018, but shares are already trading near the offer price, so the market thinks it’s highly likely to close.
Now what
Continue Reading Below
ADVERTISEMENT
Given the massive premium being paid, I think it’s probably wise to take some gains off the table. There’s still a possibility that the acquisition won’t close — and if that happens, shares could give back today’s gains.
What we do know is that General Cable’s strategic review led to a big buyout offer, which drove shares higher today.
10 stocks we like better than General Cable
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now… and General Cable wasn’t one of them! That’s right — they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of December 4, 2017
Travis Hoium has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
