COTY merger with P&G Salon/Color/Cosmetics/Fragrance business should result in an exchange offer for PG shareholders. Deal value for PG is $12.5B; PG market cap and 7% exchange discount implies 5.3% of PG S/O would be exchanged for COTY shares.
Comparable share exchange are 3.7% S/O for DHR/NTCT, 8.4% S/O for CBS/CBSO (18% exchange prorate), 10.1% S/O for TPH/WY (29% tender prorate) and 6.8% S/O for PPG/GGC (15% tender prorate).
DHR/NTCT expires tonight. About 150M shares have traded since the exchange offer was announced on May 14; the tender prorate would be 17.4% if 150M shares are tendered into the offer and 21.7% if 120M shares are tendered. The indicative exchange (by our calculations) is 2.5534 NTCT per DHR share, which means the 2.4 maximum ratio is in effect; the $85.74 DHR closing price is a 0.76% discount to the value of the NTCT shares received (at the NTCT $36.00 closing price). the NTCT share price has declined 12.4% since closing at $41.10 on April 30; DHR shares are up 4.7% over the same time period.
The average price of seven comparable-sized communications equipment peers is down 3.4% over the same timeframe (ranging from 9.0%-(15.0)%). Long-term DHR shareholders are unlikely to switch into NTCT shares; the % of S/O tendered in CBS/CBSO, WY/TPH & PPG/GGC was 46%, 35%, 45%. A 120M-150M share exchange tender implies a 21.7%-17.4% prorate.