EasyLink Services International Corp. (ESIC) was recommended by The CHEAP Investor at $4.39 in Investment Digest issue 712, dated February 1, 2012. ESIC is being bought out at $7.25.
“Recommended in the February issue at $4.29, EasyLink received a buyout offer at $7.25 per share (+70%). The company has entered into a definitive agreement and plan of merger with OpenTextTM Corporation (OpenText). Under the terms of the agreement, OpenText will acquire all of the outstanding common stock of EasyLink for $7.25 per share in cash for each share of common stock of EasyLink.
“EasyLink’s board of directors determined that the offer from OpenText represented a significant premium and pursuant to its fiduciary duties unanimously approved the proposed merger. The acquisition of EasyLink by OpenText is subject to customary conditions, including the approval by EasyLink shareholders and regulatory authorities, and is expected to close in mid to late summer of 2012.
“‘After a thorough review of a broad range of alternatives to enhance stockholder value, our board of directors concluded that the best available option was a merger with OpenText,’ said Kim Cooke, chairman of EasyLink. ‘We are pleased that this transaction appropriately recognizes the value of EasyLink’s relationships, technology and solutions, while providing our stockholders with an attractive cash premium for their investment.’
“OpenText, headquartered in Waterloo, Ontario, is the world’s largest independent provider of Enterprise Content Management software with $1.03 billion in revenue and support for approximately 46,000 customers and millions of users in 114 countries and 12 languages. ...
“There have been several lawsuits filed against EasyLink Services because one analyst estimated that the stock’s true value was $8 per share. We think shareholders’ best bet it to take the $7.25 (70% profit) and move on.”
- Bill Matthews, The Cheap Investor, July 2012