V.5:5 (165-170): How to spot takeover candidates by Norman S. Wei
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How to spot takeover candidates by Norman S. Wei
The shares of Celanese Corp. were trading at 218-1/2 at the close of Oct. 31. They shot up to a high of 247-1/2 on Nov. 3 and closed at 242-1/2—an increase of $24 per share!
Integrated Software's stock jumped from 9 to 12- 1/4 over-night on Nov. 3. In late February 1986, Western Airlines' stock jumped from 8-7/8 to 12-1/4 within a week.
These were all takeover or merger candidates. Celanese agreed to merge with American Hoechst Corp. for $245 per share. Computer Associates International Inc. acquired Integrated Software for 12-3/8 a share in cash. Western Airlines was taken over by United Airlines.
To the casual observer of stock prices, the explosive nature of these stocks appears to be totally unexpected. For the six months preceding the dynamic jump in price, Integrated Software's prices actually declined from 13 to a low of just under 8. Celanese traded between 204 and 215 for the month preceding the takeover announcement. Western Airlines' stock prices fell for four months prior to its being taken over.
The shares of Celanese Corp. were trading at 218-1/2 at the close of Oct. 31. They shot up to a high of 247-1/2 on Nov. 3 and closed at 242-1/2—an increase of $24 per share!
Integrated Software's stock jumped from 9 to 12- 1/4 over-night on Nov. 3. In late February 1986, Western Airlines' stock jumped from 8-7/8 to 12-1/4 within a week.
These were all takeover or merger candidates. Celanese agreed to merge with American Hoechst Corp. for $245 per share. Computer Associates International Inc. acquired Integrated Software for 12-3/8 a share in cash. Western Airlines was taken over by United Airlines.
To the casual observer of stock prices, the explosive nature of these stocks appears to be totally unexpected. For the six months preceding the dynamic jump in price, Integrated Software's prices actually declined from 13 to a low of just under 8. Celanese traded between 204 and 215 for the month preceding the takeover announcement. Western Airlines' stock prices fell for four months prior to its being taken over.
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