MYE [Archive]

**Rake** Mon Dec 10, 2007 10:10 pm

MYE
Hi Blast,
Today GSCP delayed the close of MYE deal from Dec 15 to April 30 next year. For the delay, they paid $35mil. Why didn't the MYE management sue GSCP instead of accepting the delay? Could you comment on the MYE deal?

I have the question for some time. When a deal fails, sometimes the seller will sue the buyer to enforce closing, but sometimes he won't. If the seller pays the breakup fee, he can always walk away legally, right? What is the basis of the lawsuites?

Is this an indication that the credit crunch is quite severe now? GS risked its reputation from walk from a deal, which is relatively small. What will happen to other announced deals?

Thanks,
-Rake

**xuedong_zhang** Mon Dec 10, 2007 10:28 pm

Re: MYE
Yeah, and what is the difference between investor sue the buyer, and the company sue the buyer? I guess if investor sue, it maybe
much harder.

Now, the management team is really a issue here, as i can see
Rake wrote: Hi Blast,
Today GSCP delayed the close of MYE deal from Dec 15 to April 30 next year. For the delay, they paid $35mil. Why didn't the MYE management sue GSCP instead of accepting the delay? Could you comment on the MYE deal?

I have the question for some time. When a deal fails, sometimes the seller will sue the buyer to enforce closing, but sometimes he won't. If the seller pays the breakup fee, he can always walk away legally, right? What is the basis of the lawsuites?

Is this an indication that the credit crunch is quite severe now? GS risked its reputation from walk from a deal, which is relatively small. What will happen to other announced deals?

Thanks,
-Rake

**xxyygorich** Mon Dec 10, 2007 11:33 pm

Re: MYE
u can not sue GSCP.

U can not sue MYE either. As a shareholder, what do u expect from MYE, liquadating the company to pay a penalty?

Two lessons learnt from MYE for me.
1. The first postpone was too easy. This kind of clause in the agreement is a big mistake in the first place.
2. Insider's purchase is not enough, there was almost no insider purchase before and after the agreement.

xuedong_zhang wrote: Yeah, and what is the difference between investor sue the buyer, and the company sue the buyer? I guess if investor sue, it maybe
much harder.

Now, the management team is really a issue here, as i can see
Rake wrote: Hi Blast,
Today GSCP delayed the close of MYE deal from Dec 15 to April 30 next year. For the delay, they paid $35mil. Why didn't the MYE management sue GSCP instead of accepting the delay? Could you comment on the MYE deal?

I have the question for some time. When a deal fails, sometimes the seller will sue the buyer to enforce closing, but sometimes he won't. If the seller pays the breakup fee, he can always walk away legally, right? What is the basis of the lawsuites?

Is this an indication that the credit crunch is quite severe now? GS risked its reputation from walk from a deal, which is relatively small. What will happen to other announced deals?

Thanks,
-Rake

**blast_investor** Tue Dec 11, 2007 9:40 pm

Goldman Sach as bank never walked way on any deal so far yet. So Goldman Sach bank never lost reputation on MYE. Reputation is extremely important for banks, so far banks kept reputation.

The party on MYE deal is Goldman Sach hedge fund.

On MYE, my take is that Goldman Sach hedge fund's position is very unfriendly to MYE shareholders: If MYE is value next year, GS will bank value, if MYE is not value due to credit market conditions, or industry change, GS will walk away. The original term of contract was bad. The recent extension is even worse with no teeth. It sounds to me that MYE management offered a long term option excercist to GS hedge fund without getting paid for option premium.

The option nature of MYE deal allows GS hedge fund to walk away without paying serious money. This makes MYE stock not a good candidate for arbitrage.

We probably can not blame GS hedge fund. It is MYE management that allows GS hedge fund to delay or walk away without paying too much cost. GS hedge fund never broke any deal yet because MYE management so far agreed on all the extension, delay etc, so far.

**blast_investor** Tue Dec 11, 2007 9:46 pm

Re: MYE
xxyygorich wrote: u can not sue GSCP.

GSCP never broke any any deal contract, how can MYE shareholders sue GSCP?

GSCP = buyer
MYE = seller
bank = lender

buyer want to change contracts, MYE management/board (seller) agrees. So there is no dispute here.

My take is that MYE management/board's behavior was not shareholder-friendly on MYE deal issues. This is very sad and bad..

**xxyygorich** Tue Dec 11, 2007 9:48 pm

GSCP now can walk away from the deal without any penalty.
There will be NO additional $35 mil from GSCP for breaking the deal.

The $35 mil is like the premium which GSCP paid to buy a Apr 08 $22.5 call of MYE. It might exercise it and it might not.

**blast_investor** Tue Dec 11, 2007 9:53 pm

Re: MYE
Rake wrote: Hi Blast,
I have the question for some time. When a deal fails, sometimes the seller will sue the buyer to enforce closing, but sometimes he won't. If the seller pays the breakup fee, he can always walk away legally, right? What is the basis of the lawsuites?

Is this an indication that the credit crunch is quite severe now? GS risked its reputation from walk from a deal, which is relatively small. What will happen to other announced deals?

Thanks,
-Rake

Some buyout contracts allow buyer to walk away freely without reason, just pay a fee. In this case, buyer can walk away by paying.

Some buyout contracts do not allow that.

So it depends on contract whether allow or not allow. This means that it depends on management/board of public companies on this issue.

In my opinion, any deal to allow buyer to walk away by paying a small fee is not good candidate for arbitrage candiate, unless the buytout price is so cheap, such a bargain for buyers, (but still higher than current stock price).

**xxyygorich** Tue Dec 11, 2007 9:55 pm

Re: MYE
Hi Blast,

When the buyer wants to change the term, who has the authority on the sellers' side to agree or to reject the offer? CEO or the chairman of the board or a vote between all board members?

The chairman of MYE and his familiy has > 10% holding of the MYE.
It's very weird that MYE is so shareholder-unfriendly.

blast_investor wrote: xxyygorich wrote: u can not sue GSCP.

GSCP never broke any any deal contract, how can MYE shareholders sue GSCP?

GSCP = buyer
MYE = seller
bank = lender

buyer want to change contracts, MYE management/board (seller) agrees. So there is no dispute here.

My take is that MYE management/board's behavior was not shareholder-friendly on MYE deal issues. This is very sad and bad..

**blast_investor** Tue Dec 11, 2007 10:00 pm

xxyygorich wrote: GSCP now can walk away from the deal without any penalty.
There will be NO additional $35 mil from GSCP for breaking the deal.

The $35 mil is like the premium which GSCP paid to buy a Apr 08 $22.5 call of MYE. It might exercise it and it might not.

$35 million can not even counted as option premium. $35 million belong to MYE shareholders based on old contracts to close by end of 07.

MYE management/board offered an option deal with no premium cost. Bad deal for MYE contracts.

Option deals are good if the price is above current stock price, and premium is good. The current deal dose not sounds good deal so far.

**blast_investor** Tue Dec 11, 2007 10:04 pm

Re: MYE
xxyygorich wrote: Hi Blast,

When the buyer wants to change the term, who has the authority on the sellers' side to agree or to reject the offer? CEO or the chairman of the board or a vote between all board members?

The chairman of MYE and his familiy has > 10% holding of the MYE.
It's very weird that MYE is so shareholder-unfriendly.

The board has the final decision. Chairman alone can not 100% decides on board's direction. But in most cases, chairman of board controls the board.

**Rake** Wed Dec 12, 2007 6:39 pm

http://www.ownershipanalyzer.com/InstHistory.aspx?cik=69488&ticker=MYE&instCik=886982

Goto this link, GS did have 3.8mil share of MYE. They announced the deal and unloaded all their shares at near peak price. Now, they are walking away from the deal. It seems to be to be a brillinant way to make sure money. Is this legal?

Wall street is like a joke. Today, Keybanc came out to upgrade MYE to "aggressive buy". If you dig a bit, you will know Keybanc is a major shareholder. The upgrade is sure none sense. If they think it is a value, I bet they will accumulate shares secretively.

**xxyygorich** Wed Dec 12, 2007 10:30 pm

someone questioned the accuracy of this data resource.

Rake wrote: http://www.ownershipanalyzer.com/InstHistory.aspx?cik=69488&ticker=MYE&instCik=886982

Goto this link, GS did have 3.8mil share of MYE. They announced the deal and unloaded all their shares at near peak price. Now, they are walking away from the deal. It seems to be to be a brillinant way to make sure money. Is this legal?

Wall street is like a joke. Today, Keybanc came out to upgrade MYE to "aggressive buy". If you dig a bit, you will know Keybanc is a major shareholder. The upgrade is sure none sense. If they think it is a value, I bet they will accumulate shares secretively.