siddharth18 Posted April 14, 2013 Share Posted April 14, 2013 http://www.insurancejournal.com/news/international/2013/04/09/287721.htm The Qatar Financial Centre Authority (QFCA) announced that it has reached an agreement to sell Qatarlyst, an electronic trading exchange for the global insurance and reinsurance industry, to Ebix Singapore Pte Limited, a subsidiary of Ebix, Inc., an international supplier of On-Demand software and E-commerce services to the insurance industry. A blistering short attack on Ebix by a totally new and unknown entity in 3....2....1.... Link to comment Share on other sites More sharing options...
Cardboard Posted April 14, 2013 Share Posted April 14, 2013 "Ebix considers the size of the acquisition immaterial at present and thus did not disclose the financial details of the transaction." Love it! I would go all in into this company. http://m.yahoo.com/w/legobpengine/finance/news/qatar-financial-centre-authority-sells-152154298.html?.intl=us&.lang=en-us Cardboard Link to comment Share on other sites More sharing options...
SFValue Posted May 1, 2013 Share Posted May 1, 2013 http://finance.yahoo.com/news/ebix-inc-enters-merger-agreement-133029301.html EBIX acquired by non other than Goldman Sachs for 20/share 45 day go to shop. Link to comment Share on other sites More sharing options...
Liberty Posted May 1, 2013 Author Share Posted May 1, 2013 Wow, that really sucks (except for those who bought at the recent bottom). I guess GS probably does pretty good DD, so it probably invalidates the short-thesis that it's all smoke and mirrors and fraud, but the price seems really low to me. Makes me glad I sold out months ago and plowed the proceeds into BAC and AIG warrants. I'm guessing that all the recent short attacks and drama just really, really hurt Robin Raina (the attacks were so personal), and he decided that being a public company wasn't worth it anymore. He'll no doubt stay on with a nice set of incentives and keep building the company for GS.. Link to comment Share on other sites More sharing options...
LongTerm Posted May 1, 2013 Share Posted May 1, 2013 I find the buyout price very low. I had thought that Raina might act as a guarantee against such a lowball offer, but, unless I'm missing something, it doesn't seem to have worked out that way. Perhaps he was just tired of the shorts, or is there an ulterior motive.. like a short squeeze? 10.6 million shares short (April 15) and 37.1 million shares out. The dynamics from now until the 'go shop' is over should be interesting. Shares are already trading well over $20 buyout price midmorning. Not sure how the shorts covering will impact the final buyout price. Link to comment Share on other sites More sharing options...
Liberty Posted May 1, 2013 Author Share Posted May 1, 2013 I find the buyout price very low. I had thought that Raina might act as a guarantee against such a lowball offer, but, unless I'm missing something, it doesn't seem to have worked out that way. Perhaps he was just tired of the shorts, or is there an ulterior motive.. like a short squeeze? I think he could have blocked external takeover offers if he wanted to, but in this case, maybe he's the one who approached GS and so he didn't have the best bargaining position to ask for a high price? Or maybe this is just going private and Raina retains his equity in the company. Not a bad deal for long-term shareholders I suppose.. Someone who held EBIX for 10 years has made about 62x their money... Link to comment Share on other sites More sharing options...
Edward Posted May 1, 2013 Share Posted May 1, 2013 I find the buyout price very low. I had thought that Raina might act as a guarantee against such a lowball offer, but, unless I'm missing something, it doesn't seem to have worked out that way. What you're missing is probably that Raina didn't sell. The company goes private and he keeps his share of the business, so the transaction is transparent for him. I also agree that the buyout price is pretty low. I would think 25$ is closer to fair value and I would be relatively satisfied with that. Link to comment Share on other sites More sharing options...
CONeal Posted May 1, 2013 Share Posted May 1, 2013 Just for future reference, if someone wanted to counter to take private. What would you do just go to the bank and say hey I want 700 million and I need it in 45 days? Link to comment Share on other sites More sharing options...
alpha231616967560 Posted May 1, 2013 Share Posted May 1, 2013 It will be interesting to see what else emerges here. The fact that the buyer is Goldman Sachs and not, say, Oracle suggests that Raina and co. will be providing some management expertise going forward. I mean, obviously Goldman Sachs isn't going to run this company. Maybe they have a buyer lined up? The 45 days is an interesting twist. Maybe it was just a way to twist the guts of the shorts a bit and invite a higher bid. Seems like this company (with all the short theses dispelled) would bring a significantly higher offer. Link to comment Share on other sites More sharing options...
mankap Posted May 1, 2013 Share Posted May 1, 2013 I am disappointed that it is being sold so cheap. I think what RObin is getting in return is he will be the CEO and can run the company like he was doing before. They do not have to worry about shorts and SEC now and focus the attention on company now. The press release says that GS will help EBix to realize its potential. I think it shows that it is failure of US capital markets.If SEC cannot control the shorts who are spreading lies, more companies will go private.SEC should change the rules and force to shorts to file their positions like longs and take steps to control naked shorting. Link to comment Share on other sites More sharing options...
LC Posted May 1, 2013 Share Posted May 1, 2013 I agree, however I lay more blame on Ebix for accepting such a low price...unscrupulous market participants will always exist, history has shown us that...although I do agree that short positions should be disclosed! Link to comment Share on other sites More sharing options...
alpha231616967560 Posted May 1, 2013 Share Posted May 1, 2013 Well, one thing to note is that this should turn out fine for Mr. Raina - he will continue to participate in upside both from whatever payouts he receives from this deal and further upside when the equity for the company is valued appropriately (i.e. future IPO, sale in a few years, etc.). This is a fairly effective way to take the heat from the manipulative market off without much downside to management. Link to comment Share on other sites More sharing options...
bookie71 Posted May 1, 2013 Share Posted May 1, 2013 It would be nice IF the shareholders of EBIX could do a class action against the short sellers. It would be a nice payback. Link to comment Share on other sites More sharing options...
mankap Posted May 1, 2013 Share Posted May 1, 2013 Alpha I could not agree more with you. Robin has everything to gain and nothing to lose.HE will get tons of stock options in the new capital structure and he can show the performance he will have bigger share of equity. GS will probably sell it or do a IPO in 3-5 years and Robin will get all the gains. Meanwhile Robin does not have to worry about analysts,shorts,investors and SEC. Link to comment Share on other sites More sharing options...
Martian Posted May 2, 2013 Share Posted May 2, 2013 looks like still Bloomberg is not done with Ebix.. http://www.bloomberg.com/news/2013-05-02/goldman-takes-ebix-private-as-probes-said-to-intensify.html "That probe, consisting of interviews with former employees, has since been upgraded to a formal investigation, according to a person who was briefed on the matter after the Goldman Sachs deal was announced and who asked not to be named because he has not been authorized by the SEC to discuss confidential matters. Ebix is also the subject of an Internal Revenue Service investigation, according to this person, along with a second individual with direct knowledge of the matter." “We believe that should Goldman Sachs or another entity acquire Ebix, they will come to regret it,” wrote Daniel Yu, director of research at Gotham City. “That said, public investors are clearly better off if Ebix no longer participates in the public markets.” Link to comment Share on other sites More sharing options...
siddharth18 Posted May 2, 2013 Share Posted May 2, 2013 The veritable onslaught of attacks continue. Link to comment Share on other sites More sharing options...
Liberty Posted May 3, 2013 Author Share Posted May 3, 2013 The veritable onslaught of attacks continue. It's obvious that some very deep pockets are attacking EBIX, so they probably have a lot to lose and will fight to the bitter end. Link to comment Share on other sites More sharing options...
twacowfca Posted May 3, 2013 Share Posted May 3, 2013 Goldman Sachs private equity arm has announced that it will buy a majority interest in EBIX for $20/share. Robin Raina and his Rennes Foundation will retain a substantial interest in EBIX. :) Link to comment Share on other sites More sharing options...
LongTerm Posted May 3, 2013 Share Posted May 3, 2013 It looks to me like yesterday's Bloomberg piece was planted to avert a short squeeze by 'shaking the tree' and getting EBIX holders to 'consider' the consequence if Goldman doesn't go through with its buyout. If that was indeed the strategy it seems to have worked, as almost 5 million shares changed hands yesterday and the share price dropped a dollar. So over the last two days over 10 million shares have traded, about enough for the shorts to have covered. I can't characterize yesterday's "news item" as anything other than pure market manipulation; Unfortunate that the SEC seems powerless in these situations. Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted May 3, 2013 Share Posted May 3, 2013 1- Look at the history of Crazy Eddie. Crazy Eddie was fraudulent and they were still taken over by private equity / turnaround specialists. Sometimes those PE guys don't do due diligence. And sometimes people will make money on fraudulent stocks. 1b- It's not clear to me that EBIX has fraud occurring or not. I have no position in this thing and never did. "That probe, consisting of interviews with former employees, has since been upgraded to a formal investigation, according to a person who was briefed on the matter after the Goldman Sachs deal was announced and who asked not to be named because he has not been authorized by the SEC to discuss confidential matters. 2- It may be unlikely that EBIX is being probed. If the SEC is officially probing a company, then the company should disclose it. If insiders don't disclose it, they may face legal liability. It is a really good idea for them to disclose. 3- Also, many SEC investigations don't lead anywhere. They will only keep going if they find really concrete information that will hold up in court. A SEC investigation doesn't necessarily mean anything. Since EBIX hasn't disclosed an official SEC investigation, there probably isn't a SEC investigation. Also, it seems that Raina has flat out stated that there isn't a SEC investigation (back in November)? If he is lying, he would get into a lot of legal trouble. He probably isn't. Link to comment Share on other sites More sharing options...
beerbaron Posted May 4, 2013 Share Posted May 4, 2013 I have no position in this stock but I would like to give my comment about the buyout. [*]Rayna has stated to one of our fellow board member that it's greatest model was Buffett [*]Buffett would consider the shareholders as his partners [*]Buffett would not have cared about the price of it's stock or the amount of short, if you don't need to issue stock. [*]The underlying value of the stock is the stream of cash flows. Based on this: If he's selling because he's tired of being a public company. I believe he's screwing it's shareholders/partners. Not like it's model. If he's selling because there is a short interest. I believe that it's very short term sighted. Not like it's model. I don't think Rayna is behaving ethically BeerBaron Link to comment Share on other sites More sharing options...
mankap Posted May 4, 2013 Share Posted May 4, 2013 I agree, the deal is not good for small shareholders. Raina has not proved good at capital allocation.He may be good operational manager but this deal shows that he is not a good capital allocator. Goldman is taking 600m in debt for the deal.Ebix could have done it themselves. Ebix could have issued 200-300m in bonds and bought back half the company. I do not know why they did not do it. Link to comment Share on other sites More sharing options...
Fairfaxnut Posted May 5, 2013 Share Posted May 5, 2013 This may pose as a great workout play now. I was a shareholder, and I'm not completely mad about the deal. If you listened to the last conference call, there was a large insurance service deal that had been "delayed"....my take is all the bad media and SA articles affected how the business operated. Yes, it would be better if they took themselves private, but I do think Ebix needed some help with the M&A. Considering Raina did a lot (almost taking all FCF at one point for share buybacks), kept raising the dividend, bought companies at good prices and provided further clarity on foggy areas of the business, I think he was wise to take this route albeit for a larger buyout. Like Liberty mentioned before, I am kinda happy to have the drama out of my portfolio. Link to comment Share on other sites More sharing options...
Liberty Posted May 7, 2013 Author Share Posted May 7, 2013 http://www.whopperinvestments.com/ebix-merger-arb-does-the-risk-outweigh-the-reward Link to comment Share on other sites More sharing options...
Vish_ram Posted May 9, 2013 Share Posted May 9, 2013 I wrote a SA article today http://seekingalpha.com/article/1418841-ebix-shareholders-are-getting-a-raw-deal Link to comment Share on other sites More sharing options...
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