Goldman Sachs Bids $20 a Share For Ebix

Goldman Sachs (NYSE: GS  ) is buying Ebix (NASDAQ: EBIX  ) .

That's the long and the short of today's news that Atlanta-based insurance software provider Ebix has agreed to a $20-per-share buyout offer from the investment banker. Including assumed debt, the parties value this transaction at $820 million, and say it represents a tidy 18% premium to Ebix's recent pre-merger-announcement prices.

On the other hand, the price is only about a 7.5% premium over what Ebix shares fetched at close of trading Tuesday, and Ebix shareholders -- and their lawyers -- aren't so sure the buyout price is a good one. The price is also more than 10% below Ebix's valuation a year ago. Shareholder derivative lawsuit announcements challenging the sale are already flying.

Combined with the merger deal's "go-shop" provision, which permits Ebix to seek out better bids from third parties over the next 45 days, investors appear to be betting that Goldman will either have to raise its bid, or see it beat by another bidder.

How do we know this? Ebix shares today rose 10.7% to close at $20.60 -- $0.60 more than Goldman has offered to pay.


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  • Report this Comment On May 01, 2013, at 5:03 PM, jhaw wrote:

    As a long term shareholder I believe that $20 a share is an extremely low offer. I think it is very likely that the management and board have significant conflicts of interest that would seriously compromise their ability to obtain maximum value for the owners of the company. I can only hope that other offers will materialize so we can discover the true market value of Ebix.

  • Report this Comment On May 01, 2013, at 5:15 PM, leaderoftheback wrote:

    ZIP

    PWER

    EBIX

    Lock in those losses, folks!

    I think this suggests, above all else, that there probably was some sleight of hand in the accounting. While I take great satisfaction in at least a few of the shorts taking a hard hot one in the shorts, I'm left to wonder how any board of directors that believes in their company, a board that saw the share price approach $30 before a supposedly BS short attack, could agree to this price? Must be what it's really worth, eh? Lord knows nobody knows better than the board of directors!

    We are being ripped off...by the shorts, by Wall Street, by management and by the board. How's that feel to you?? You might guess that I'm unhappy. If you are a stockholder of EBIX (yes, I am), Wall Street wins again, and what are we "owners" going to do about it?

    This time, I vote for the lawyers. Go git 'em!!

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