Shares of Cardtronics (CATM) soared more than 30% on Wednesday after the nonbank ATM operator said it received a buyout proposal from a private equity firm. The stock is trading above the offer price, implying the market believes this takeout saga has more room to run.
Before markets opened on Wednesday, Cardtronics released a statement saying it has received an offer from funds associated with Apollo Global Management (APO) and Hudson Executive Capital to acquire its shares for $31 per cash. Hudson Executive Capital managing partner Douglas Braunstein is already a Cardtronics director and will recuse himself from deliberations, but the other members of the company's board are now assessing the proposal.
As always with these things, there is no final deal in place and no guarantees that there will be a deal signed. But the market is optimistic. Shares of Cardtronics as of 12:30 p.m. EST Wednesday traded at nearly $35 per share, more than 10% above the offer price.
That suggests that investors are hopeful that either Apollo and Hudson will have to pay up to seal a deal or that the attention will put Cardtronics on the radar screens of other buyers and prompt a bidding war.
Investors' opinions on the offer likely depend on how long they have owned the shares. The $31 price is well above where the stock was trading yesterday, but significantly below the company's $47.41 per-share high set back in January.
The company was hit hard by the COVID-19 pandemic, which caused people to stay at home and reduced demand for ATMs and cash payments. That demand is likely to return once we have a vaccine, but with consumer behaviors changed during the lockdown and financial services rapidly evolving away from cash payments, there is no guarantee that demand will ever return to the prepandemic levels.
For now, investors should sit tight and wait to see what the board can negotiate.