Limco-Piedmont to Delist

limco-piedmontLimco-Piedmont (LIMC), which we previously profiled on May 1st, has filed to delist.  The shareholder meeting was scheduled for 10 am today (July 2nd), and shareholders were to vote on a plan of merger with its majority owner TAT Technologies (which holds over 60% of outstanding shares).  TAT has offered 1/2 share of its stock for each share of LIMC.

On the day we profiled Limco, its stock closed at $2.54 per share.  Today, TAT trades between $7.6 and $8 per share.  During that span, the S&P 500 moved from 878 to 919 (yesterday’s close).

Disclosure: I, or persons whose accounts I manage, own shares of Limco-Piedmont at the time of this writing.

3 responses to “Limco-Piedmont to Delist

  1. Very nice. Shame I didn’t look at this one.

  2. Is this a pure arbitrage (i.e. you hedged by shorting TAT) or do you just own one of them?

    If you did not hedge, were you investing primarily as a long-term investment (with a merger being a bonus)? I’m curious how you factored in the potential downside if the deal failed?

  3. In different accounts, different strategies–most of my holdings were unhedged.

    I thought of this investment as an undervalued general security with a catalyst. In terms of expected value, I thought there was better than a 50% chance that the merger price would be raised. In the original post, I calculated the liquidation value at $2.46 per share.

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