The NYSE trading price of Cox Radio shares fell Monday after the company’s special committee of independent directors approved a $3.80 per share buyout offer from Cox Enterprises. Nonetheless, the market price is still above that level as speculators hold out hopes that the offer will still be increased.
Friday’s endorsement of the $3.80 price hasn’t convinced everyone that no higher offer will be forthcoming. Cox Radio closed Monday at $4.01, down 24 cents from Friday. The stock has traded above the offer price since Cox Enterprises announced its bid.
Cox Enterprises already owns 78% of Cox Radio and has said it is not interested in selling its stake, so no competing bid is expected. Still, some disgruntled shareholders are still trying to put pressure on Cox Enterprises to pay more to buy them out. As previously reported, at least three class action lawsuits have been filed to try to block the tender offer unless the price is increased.
RBR/TVBR observation: Some shareholders may think the price is too cheap, but if Cox Enterprises goes ahead with its tender and increases its 78% stake to 90% or more, the speculators now buying at $4-plus will be squeezed out at $3.80, with only the hope of a court someday, maybe, giving them more.