Quick MANDA Update

Two additions to MANDA, my M&A portfolio, were made this week. The first was yesterday’s┬ápurchase of Sinoenergy (SNEN) for $1.81. On Monday, private equity made a cash offer for the company amounting to $1.90 per share. No closing date was given.

Today I picked up Rubio’s Restaurants (RUBO) for $7.55 a share after a private equity group offered $8 in an unsolicited bid. The board is considering the offer and although this deal is by no means close to being locked in, I do think that Rubio’s stands a good chance to sell at the $8 price or possibly better.

To perform their fiduciary duty to the shareholders, the board must consider this proposal since it represents a 33% increase over the $6 recent share price. However, I think that if they agree to this offer, they’re going to be slapped with shareholder lawsuits since the price of the stock was trading over $8 before 2008. The board seems to be stuck between a rock and a hard place but this time I believe the shareholders will be the ones to come out ahead.

As an aside, I was tempted to purchase Starent Networks (STAR) but seeing that the closing date could be a good six months from now, I decided that the reward wasn’t worth it at these levels. If Starent stock falls under $33.60, then it will be worth my while. (Cisco (CSCO) bid $35/share for Starent on Tuesday.)

MANDA Portfolio 10-15-09

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