Interestingly, we saw Paine Schwartz reduce its bid for CGC by 30c to $3.20 on Monday, after undertaking two months of due diligence and accounting for Costa’s weaker profit outlook, including a painful $30 million hit from adverse weather conditions. On the day, the stock closed more than -12% below the “best & final” offer, which, even after their lower bid, represents a price close to the stock’s 2-year high.
- We can still see this deal going ahead with a clearly keen buyer and an engaged seller. If the stock tests last month’s $2.67 low, the risk/reward would screen well, in our opinion.
- However, we are unlikely to add CGC to any of our portfolios with this underperformer capable of disappointing again as weather patterns get more extreme.
MM is neutral CGC around $2.80
Add To Hit List
