Posts for Ticker ‘DVW’

Covad, Public No More (DVW)

Platinum Equity has announced that the private equity firm has now completed the acquisition of Covad Communications Group, Inc. (AMEX: DVW) in a merger with a total value of approximately $470 million.  An affiliate of Platinum Equity acquired all outstanding shares of Covad stock for $1.02 per share in cash.

This was one we reviewed for our special situation newsletter last year for what would have now netted close to 30% to completion when the spread had widened out to the point it looked at risk.  We determined after speaking with all parties involved that the deal was not in jeopardy, but the sector was in a "shoot and ask questions later" mode as many other deals were failing.

We also just covered this one last month with more than a 10% gain for 3-weeks to completion in our "10 Stocks under $10" weekly newsletter.

This merger looks like it is done, over and out.  You can join our open email distribution list to hear about key M&A, merger speculation, IPO’s, special financings, restructurings and more.

Jon C. Ogg
April 15, 2008

Jon Ogg produces the Special Situation Investing Newsletter.  He can be reached at jonogg@247wallst.com and he does not own securities in the companies he covers.

Posted on: April 15, 2008 – 2:27 pm in Mergers and Buy Outs, , ,

Platinum’s Buyout of Covad Set To Close (DVW)

As we have been expecting, Covad Communications Group Inc., (AMEX:DVW) announced that it has obtained all of the required regulatory approvals for it to be acquired by an affiliate of private equity firm Platinum Equity.

This deal had already been approved by shareholders, and now it has secured approval from the FCC and a number of state public utility commissions.  Covad expects that its $1.02 all-cash buyout is expected to close on April 15, 2008.

We recently reviewed this transaction for what we felt was a safe bunt for a 10% return in our "10 Stocks Under $10" newsletter, and we also covered this one with an "all-clear" signal from both Platinum and Covad when the spread widened out to more than 25% and it looked like an at-risk deal.

Shares of Covad closed at $0.95 yesterday and are indicated up at $0.98 this morning.

Jon C. Ogg
March 26, 2008

Jon Ogg produces the Special Situation Investing Newsletter and can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: March 26, 2008 – 8:25 am in Internet, Mergers and Buy Outs, Private Equity, Telecom,

Covad Drops Again, Yet Merger Supposedly Still On (DVW)

Covad Communications Group Inc. (AMEX:DVW) fell almost 5% today to aprice of $0.79 on double the normal trading volume.  But shares fellalmost 10% on Monday to $0.83, on normal volume.Back on October 29, 2007, the company announced that was being acquiredby private equity firm Platinum Equity.  This $1.02 price was almost a60% premium to the October 26 closing price, although the 52-weektrading range was $0.60 to $1.54 and Covad was over $2.00 in early 2006.

If you track pending mergers or merger arbitrage, you know that it’s time to start getting worried about a pending merger when you see two back to back price drops in the shares of the acquisition target.  That holds true even if it is a $1.00 stock (or less).  We track these spreads for identifying opportunities (or trouble) for our Special Situation Investing Newsletter subscribers.

This merger is subject to shareholder approval, and the fed filing from yesterday still notes the following: After careful consideration, our board of directors has unanimously determined that the merger agreement and the merger are advisable and fair to, and in the best interests of, Covad and its stockholders. Our board of directors has unanimously approved the merger agreement. But the proxy format also shows the following: Your vote is very important, regardless of the number of shares you own.  The merger agreement must be adopted by the affirmative vote of holders of a majority of our outstanding common stock entitled to vote at the special meeting. Therefore, if you do not return your proxy card, vote via the Internet or telephone or attend the special meeting and vote in person, it will have the same effect as if you voted “AGAINST” approval of the adoption of the merger agreement.

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Posted on: December 4, 2007 – 7:29 pm in Internet, Mergers and Buy Outs, Telecom, , ,