BLUE BIRD CORP BLBD
October 01, 2018 - 8:01pm EST by
hkup881
2018 2019
Price: 24.25 EPS 0 0
Shares Out. (in M): 27 P/E 0 0
Market Cap (in $M): 657 P/FCF 0 0
Net Debt (in $M): 0 EBIT 0 0
TEV ($): 0 TEV/EBIT 0 0

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  • Odd-Lot Tender
* Idea not eligible for membership requirements

Description

Two economists see a $100 bill on the street. The first economist says, “Look; there’s a $100 bill.” The
second one says, “That can’t really be a $100 bill lying there, because if it were, someone would have
picked it up already.” The first economist nods and they both keep walking, leaving the $100 bill
undisturbed. Fun story—except there’s a $370 bill just lying there to pick up today.
 
Blue Bird Corp (BLBD USA) will be tendering for 1,782,568 shares on October 15 at a price of $28. The
shares closed on October 1 at $24.25, representing upside of $3.75 per share or about $370 after
commissions as there is an odd-lot preference in the tender. This means, buy 99 shares at $24.25,
tender them and get $28 per share in exactly 2 weeks. This works out to $371.25 before commissions
and around $370 after commissions. This is a 15.5% return in 2 weeks. You can only do it once per
account, but it really is free moneyunless 17,825 other people do itwhich is unlikely.
 
Why do the shares trade at such a discount to the tender offer? ASP BB Holdings LLC owns 12 million
shares (44.38% of the outstanding shares) and intends to tender all of their shares, hence there is
expected to be extreme proration of the tender for non-odd-lot holders--which has sent the share price
back to the level it was at before the tender was announced.
 
They may still change the rules in the next 2 weeks, but the share price is about a dollar above the non-
impacted share price before the tenderso risk should be about a buck at worse.
 
Sorry in advance if this is wasting space on the VIC boards. But figured some of you may want some
extra beer money. I already posted my 2 ideas so this is more about leading you to free beer, than filling my
requirement.
 
Yes Mom, I remembered to buy you 99 shares and have tendered your shares. Stop calling about the notices
you keep getting from your broker. I can explain it 10 more times, but you still won't understand it...
 

 

I do not hold a position with the issuer such as employment, directorship, or consultancy.
I and/or others I advise hold a material investment in the issuer's securities.

Catalyst

2 weeks from today, magic happens

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