CTC Media announces cash-out at $2.05/share

I wrote about CTC Media (NASDAQ: CTCM) a bit more than two months ago as an unusual merger arbitrage play. Unusual, because the exact price shareholders would receive was highly uncertain and because it was pending a licence from the OFAC because a major shareholder is subject to US sanctions. The licence was granted a month ago, and last weekend the company also announced the final cash-out price of $2.05/share and an expected closing in mid May.

CTC Media logoWhen I initiated my position the stock was trading at $1.85, so this represents a 10.8% return in less than three months. This is a pretty good result, but of course it could be that it was a risky transaction where the risks simply didn’t materialize. I personally think that that wasn’t really the case, but because there was uncertainty about the final cash-out price (in combination with the Russia factor) everybody took a conservative stance and was only willing to buy the stock at the low-end of the expected cash-out range.

Disclosure

Author is still long some CTCM

8 thoughts on “CTC Media announces cash-out at $2.05/share

  1. A.Pendo

    Hello,
    Thank you for the idea. Indeed, the return was nice and the risk seemed low. Would love to have more such opportunities. Its admirable that you to admit a possibility, however remote, that maybe we were just lucky…

    Reply
  2. mergerpie

    Sometimes we have a take a little risk to earn. I was in $CVC in Nov 2015 at $33 small position and went in big when it hit $29 in Dec 2015 when the media was speculating strong opposition to the merger by Altice. Of course it helps that Dolan, the current owner of cablevision invested 1 M of his money back then. Gradually, I pared my position as the stock rose back till now at $34. Today FCC just approved the transaction. I am going in big again to capture the last part of the buyout price at $34.90 as the closing will be ard end of may.

    Reply
  3. onlylf2

    Hi

    Thanks for the idea. So what must shareholders do now? Wait till the terms complete and we will be given dividend or sell the stock now?

    Reply
      1. Brice

        Hope so. Any time I hear about “delays” from a company that’s already had lots of government problems and is based in Moscow I get worried.

        Reply

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