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Why AMCOL International Corporation's Shares Popped Today

By Travis Hoium – Feb 12, 2014 at 4:21PM

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Is this meaningful or just another movement?

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 AMCOL International Corporation (NYSE: ACO) jumped 12% today after the company agreed to be acquired.

So what: Imerys S.A. is acquiring AMCOL for $41 per share in cash in a transaction that's valued at about $1.6 billion. AMCOL will merge with a subsidiary of Imerys, and AMCOL will actually be the surviving company. 

Now what: Shares are now trading higher than the $41 offer price, which indicates that investors think the offer will eventually go up. Usually, buyouts take place at more than a 12% premium, so I could see shareholders demanding more money. With that said, there's a risk that the deal will go off as planned, and cashing out some shares at the higher price would be a good move today.

Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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