Separately, Ares Capital (ARCC) will acquire American Capital in a deal valued at about $3.43 billion. Separately, American Capital also announced that it is selling American Capital Mortgage to American Capital Agency Corp. (AGNC) for $562 million or $2.45 per share. As a result, the transactions disclosed Monday represented total value for American Capital shareholders of $4.0 billion or approximately $17.40 per fully diluted share collectively.
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American Capital shareholders will receive $6.41 per share in cash and 0.483 Ares Capital shares for each share held.
Ares Capital Corporation’s (ARCC) stock price showed weak performance of -2.95% in last seven days, switched down -1.98% in last thirty days and it fell -1.26% in last one year.
Ares Capital shares were down 2 percent at $14.89 in early trading on Monday, while American Capital shares were up 2.4 percent at $16.00. Accordingly, Ares Capital will buy American Capital, excluding American Capital Mortgage Management, LLC.
Can American Capital, Ltd. becomes the newest Buy stock following this news?
Some initial disappointment is understandable, especially for newer American Capital shareholders who hitched themselves to Elliott Management’s bandwagon. Analysts presently have a $19.45 price target on the company’s stock, however according to data provided by Thomson/First Call the highest current target price estimate stands at $22.00 and the lowest target price estimate is $15.00. American Capital, both directly and through its asset management business, originates, underwrites and manages investments in middle market private equity, leveraged finance, real estate, energy and structured products.
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The investigation concerns whether the Xura board failed to satisfy their duties to the Company shareholders, including whether the board adequately pursued alternatives to the acquisition and whether the board obtained the best price possible for Xura shares of common stock. “Moreover, we expect the combined company to have a more diversified portfolio and a stronger balance sheet that will position it well for future growth”. Its book value per share for the most recent quarter is $21.90 while its price to book ratio for the same period is 0.88, as for as the company’s cash per share for the most recent quarter is $3.32, however its price to cash per share ratio for the same period is 5.78. Ares Management collected $229 million in base and incentive fees from Ares Capital during 2015. Together, they’ve tripled the stock market’s return over the last 13 years. A SVP and Chief Risk Officer in the company, Federico Peter J, on Thursday March 31, 2016 collected $82,500 from the sale of 4,477 shares at $18.42 each.
