What: Shares of transportation company TAL International Group, Inc. (NYSE:TAL) jumped as much as 20% today after it announced a merger with private company Triton Container International.
So what: Under the terms of the merger, the new company will be called Triton International Limited and current Triton owners will own 55% of the company and TAL shareholders will own 45%. TAL shareholders will also get a $0.54 per-share special dividend when the transaction closes.
Now what: There's no clear reason that the combined business would be worth significantly more than they are separately, but investors are implying that there will be some sort of pricing power and/or synergies in a merger. That could be the case, but it'll take some time to play out.
After today's news, I really don't see a reason to change your investment thesis on TAL International or sell shares. If you were bullish before today, a bigger company should make for an even better upside scenario, even if it takes a year or two for that case to fully play out on the market.
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.