A bit less than two months ago I wrote about the ALJ Regional Holdings going private transaction. The merger closed at the end of last month, but because of some confusing language in the merger documents people where not totally sure if accredited investors would get cash, or would be forced to accept the stock option. I thought it would basically impossible for the company to take this route, because issuing unregistered shares to non-accredited investors could get them in a lot of trouble. Today my broker put the corporate action in their system, and that makes it crystal clear that, if you do nothing, you indeed get the cash option:
Holders electing for the Stock election, Option 2, must complete the Verification Request Form and send back to IBKR for submission to the agent. Once the Verification Request Form has been received by the Information Agent, New ALJ will instruct a third-party accredited investor verification service, VerifyInvestor.com, to initiate the verification process. Holders will receive an electronic communication from the Verification Provider at the email address provided on the Verification Request Form containing instructions to follow in order to complete the verification process. In addition, the Verification Provider or New ALJ’s other representatives or agents may further reach out to confirm whether such investor would qualify as a sophisticated investor in New ALJ’s sole discretion.
Once the verification process is complete, and you receive the confirmation to move forward with the stock election, IBKR will be able to submit the tender electronically via DTC. IBKR cannot tender the shares without receiving the approval from the verification process.
It will probably take till the end of this month for the merger payout to hit my account, but I think we can safely call this trade a success.
Author has no idea if he is still long or not. The shares are still visible in my account, but since the merger closed I guess I technically don’t own them anymore?