Probably only worth it for small investors -
BSHI announced they would be going private by undertaking a reverse split of 1:100 and paying cash $7.65 to investors who owned less than $100 shares. Currently the company's shares are trading at $6.25. So small investors can buy 99 shares of BSHI at $6.25/share and get $7.65/share in a few months when the company goes private.
From the 10-Q
On August 26, 2009, the Company announced that its Board of Directors had approved a plan to deregister the Company's common stock under the Securities Exchange Act of 1934, as amended, and as a result thereof, terminate its periodic reporting obligations with the Securities and Exchange Commission. The proposed plan is expected to permit the Company to forgo many of the expenses associated with operating as a public company, including the substantial costs associated with the compliance and auditing requirements of the Sarbanes-Oxley Act of 2002.
The deregistration will be accomplished by a reverse 1:100 stock split of the Company's common shares. All shareholders owning fewer than 100 shares prior to the reverse stock split would be cashed out by the Company at a price of $7.65 per pre-split share. The reverse split will be followed immediately by a 100:1 forward split of the Company's common shares, which will return all shareholders owning more than 100 shares to the same number of shares they owned prior to the reverse and forward split transactions. If, after completion of the reverse and forward stock splits, the Company has fewer than 300 shareholders of record, the Company intends to terminate the registration of its common stock under the Securities Exchange Act of 1934, as amended. If that occurs, the Company will be relieved of its requirements to comply with the Sarbanes-Oxley Act of 2002 and to file periodic reports with the SEC, including annual reports on Form 10-K and quarterly reports on Form 10-Q.
The Company's Board of Directors received a fairness opinion from an independent financial advisor, TM Capital Corp., which provides that the price of $7.65 per share on a pre-split basis to be received by shareholders owning less than 100 shares is fair to such holders from a financial point of view. All shareholders will have a chance to vote on the proposed transaction pursuant to proxy materials which will be filed by the Company with the SEC. The Company will file a preliminary proxy statement and Schedule 13E-3 with the SEC outlining the plan.
Full Disclosure: I own shares of BSHI. I first saw this idea on Barel Karsan.
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