Shah Capital filed a 13-D today in which the investment firm offers $3.20/share for the shares of UTStarcom. The price represents a 36% premium to the closing price yesterday, and is in my opinion a steal: the company has significantly more in cash per share (~$3.85) than the price offered! Very recently UTStarcom completed a tender offer in which it paid (after a 1-for-3 reverse split) $3.60/share in cash. I’m hoping the offer will be increased, and I’m guessing that there is a decent probability that they will need to do this to get the deal done. Shah Capital and affiliates own just 20.8% of the shares currently, and in the previous tender offer less than 50% of shares were tendered at $3.60. So hard to imagine that they will get shareholder approval (or board approval) for the current deal. I’m certainly going to vote against the current proposal!

Disclosure

Long UTSI