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 cleaning and maintenance products company Zep, Inc. (NYSE:ZEP) jumped as much as 20.6% today after it announced it was being sold to New Mountain Capital.
So what: Zep is being sold for a total of $692 million, including debt, which equates to a price per share of $20.05. Zep may also solicit alternative proposals for 30 days, and shareholders will need to approve the acquisition as well.
Now what: Zep's shares topped out at $20.61 today, meaning the market is expecting this bid, or an alternate bid, will eventually lead to a sale at a higher price. But it also means investors could sell today for a price higher than the one that the current agreement would pay them.
If you own shares, it might be a good idea to take some chips off the table, just in case this bid falls through altogether. But it's also possible that a stronger bid will come through in the next month, which would send the stock higher. I just think the risk of holding out for a higher price is a big risk, so lowering that risk a bit today might be wise for investors.
Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. 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.