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 email@example.com; he does not own securities in the companies he covers.