ALJ Regional Holdings merger completed

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,, 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?

11 thoughts on “ALJ Regional Holdings merger completed

  1. GeorgeBasten

    Autostrade Meridionale seems another special situation, where CASH is larger than market cap….

    1. Alpha Vulture Post author

      Just taking a quick look, but doesn’t seem to be the case? Market cap is E50 million, and I see E20 million in cash and then a bunch of current financial assets that perhaps could be converted in cash soon. But even if they do, book value is E62 million versus E50 million market cap. With likely Italian dividend taxes (30%, and basically impossible to reclaim in Italy) if they would liquidate and distribute this to shareholders I doubt this will work out…

  2. Silver


    What do you consider a minimum expected IRR % to make an investment worthwhile for you, generally speaking ? And do you have a general guideline as to how to size your investments (I assume it is a combination of factors, perhaps you would like to share key factors) ?

    Glad to see that you are still writing !



    1. Alpha Vulture Post author

      Hi Silver,

      I would say that if I think something can make 10% after taking into account ALL risks/bad scenarios I’m interested. That of course, means that you need a base case scenario that is higher, sometimes way higher, and it’s never an exact science of course. You never know all the risks and probabilities.

      And the two key factors in sizing are 1. the risk and 2. the potential return. Companies that are highly leveraged or deals where the downside is huge if it breaks needs to be sized a lot smaller than “normal” scenarios. And of course, if something really looks attractive from a return perspective, you should bet bigger.

      But there is one key concept, when in doubt, bet smaller. Betting too big can be a massive mistake while the reverse is (almost) never true.


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