June 18, 2012
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Elster Group (NYSE: ELT ) jumped 18% today on speculation the company could be bought out.
So what: According to The Sunday Telegraph, British company Melrose is in talks to buy the company for $2.3 billion. According to the report, the company is willing to pay $20.50 per share for Elster and the company is holding out for something closer to $22 per share.
Now what: Shares are still trading more than a dollar lower than the rumored offer price, so there is potential upside if you're willing to place credence in the report. I would take a few chips off the table, but hold on for a higher confirmed offer before cashing out altogether. There is risk that any potential deal could fall through, but I think the upside potential is worth keeping some exposure right now.
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