jazz4cash
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EXC will acquire POM. I have a moderate position in POM. EXC closed today at 35.03 (Down 3.15%) and pays $1.24 dividend (3.4%). POM closed at 26.76 (+17%) and pays $1.08 (4.7%). The acquisition price is $27.25/sh and the deal is not supposed to close until 2Q15.
Now what happens?
I am specifically concerned that the dividend payout will be reduced. I assume I will get the equivalent qty of EXC shares based on the $27.25 price, but how will the dividend payout be adjusted? Should I sit tight or collect the ~17% premium and move on?
100 shares of POM pays $108 annual dividend.
Priced at @ 27.25 it buys 77.8 shares of EXC priced at 35.03.
77.8 shares of EXC pays $84 annual dividend.
Now what happens?
I am specifically concerned that the dividend payout will be reduced. I assume I will get the equivalent qty of EXC shares based on the $27.25 price, but how will the dividend payout be adjusted? Should I sit tight or collect the ~17% premium and move on?
100 shares of POM pays $108 annual dividend.
Priced at @ 27.25 it buys 77.8 shares of EXC priced at 35.03.
77.8 shares of EXC pays $84 annual dividend.
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