This may be a moot point now, given developments over the past week or two, but …
On Jan 26 in your response to MKL you stated:
“I meant Oliver Press Partners owns 3,569,360 shares of HSSO. See this filing right at the bottom of the page. But SIBL does own 20% of HSSO because SIBL has been providing HSSO with equity in excess of $12m for several years.”

However, my reading of that filing is that this was reporting the proxy agreement among OPP and several other holders of Emageon shares to have them voted in favor of the acquisition of Emageon by HSS.

Your comment on Jan 26th made me wonder about any possible OPP ownership relationship on both sides of the HSS-Emageon deal. It seems that this filing does not raise such a possibility.

It seems OPP is just the “Activist Investor” they claim to be, and they got burned in this deal by a situation they knew nothing about.

Is there anything I am missing here?

http://blogs.salon.com/0001330/2009/02/09.html#a4205

DISK is definitely not a good opportunity as they just released the following press release concerning their proposed merger on Feb. 2nd: http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20090129006396&newsLang=en

Thanks a lot for the info. I wont be looking at it now. You also raise very good points in how to study mergers and the depth of research it requires.

DISK is not a good opportunity. If you look at the merger agreement, DISK is being acquired by “The Concieived Group” which has no assets. The Conceived Group is a wholly owned sub of NYX, which has very limited assets (i.e. not nearly enough to pay for the acquisition of NYX). NYX in turn is a wholly owned sub of Q-Black, which is a privately held entity without publicly available financials. So you can’t see if Q-Black is a worthy counterparty that can actually close on the transaction.

In addition, the equity commitment letter between Q-Black and NYX is not disclosed so you can’t see if there are any financing outs. The financing language in the merger agreement does not adequately address the financing and counterparty risks; but in any event one always wants to be able to read the equity / debt commitment letters first hand to see what outs may exist. I have not read the rest of the Merger Agreement to see if there are other flaws with the transaction as this was enough for me to say “pass”

Just reporting the facts, and that’s one of them… Would like to be a computer sometimes.

Will take a look at DISK if EMAG closes on Feb 11. Since there is still a shareholder vote, I’ll wait until that passes as well as any other approval.

I meant Oliver Press Partners owns 3,569,360 shares of HSSO. See this filing right at the bottom of the page. But SIBL does own 20% of HSSO because SIBL has been providing HSSO with equity in excess of $12m for several years.

The waived conditions are “Sections 6.2(a), (c) and (d) of the Merger Agreement”.

I missed out on my order today. Will have to set it again tomorrow.

This is what Chad referred to above. SEC filings for HSSO.

Read exhibit 10.2 which is the letter from SIBL to HSSO regarding their commitment to finance and waivers to some conditions.

I didn’t know that OPP appointed 2 directors but I did see their acquisition of EMAG (SEC form 4 filings)and more importantly their purchase price was at around $2.30

I just found out that OPP also owns 3,569,360 shares of HSSO.

Accipiter Capital Management is also another big shareholder that purchased around $2.50.

You make a very good point that there could be another buyer some time later, but I prefer to leave this out of the equation (for now) as I don’t want hope to affect my decisions. Whether they are a good target for another company is a question I will have to ponder seriously after Feb 11 if something goes wrong. Until Feb 11, I’ll have to continue searching for info on SIBL.

I will continue to think through the probabilities without external factors.

But do keep us updated on your thoughts. It is very insightful and helpful to work through different scenarios together.

@ Chad
Thanks for that Chad. I searched all over the place but I couldn’t find any statement on the reasons for the delay as well.

I’ve been thinking about this deal a lot lately and trying to find ways in which the deal can fail and the risk of this whole merger but I can’t seem to find or think of anything more than what I’ve written.

The odds are very enticing and I still haven’t bought 1 week after writing up my thoughts in hopes of finding additional information, but my odds still stand as it is. Looking to buy soon with a little over 2 weeks remaining.

I didn’t know Obama was pushing to digitize records.. but if that truly is the case, maybe QSII will be a good play again.

SIBL remains committed to fulfilling its obligations under the Purchase Agreement and agrees to its obligations to fund the Merger in its entirety on February 11, 2009 or such earlier date as may be agreed between HSS and SIBL. SIBL acknowledges and agrees that it believes that it will have the ability to timely consummate the financing contemplated by the Purchase Agreement on February 11, 2009.

This deal is starting to tempt me. I would be confused why SIBL would commit 4M more to escrow if they weren’t fairly sure they can finance the deal. My biggest issue is I really don’t want to hold EMAG if the deal fails. I agree with Jae Jun, PSD was holdable….EMAG not so much.

Something else I was thinking about. I noticed Obama is pushing for more digitizing of medical records. Seeing as how EMAG does this, maybe another positive for HSSO to close deal?

Thanks for your thoughts.

As tough as the banking sector is at the moment, I find it very unprofessional that SIBL would decide to withdraw and then agree to refinance the deal without providing any reasons. I would prefer that HSSO comes out with the reason why SIBL decided to withdraw and personally, I hope the parties dont release press release to reassure investors as that would only cause the spread to close.

Regarding that $9m, you are right that it doesn’t guarantee the deal but it is a very good indication that the deal is going to be closed. I don’t think HSSO and SIBL will want the lawsuit that follows should one of them drop out anytime.

If you mean the act they pulled in December by hesitating on their participation in the deal then here is my thought: Its gotta be tough to be in banking or dependent on banking these days, unknown territory to all. As EMAG’s deal depends on SIBL’s financing, so SIBL’s deal within it might depend on other financings they have going on, and all those interdependencies in that industry are in quite a mire these days. I do think there are honest deals trying to go down in honest ways, getting these pipelines “unfrozen”, that are sidelined truly only for the complications that seem to be inherent in the banking world THESE DAYS.

From that perspective I don’t think that SIDL “pulled” anything but instead were quite honest and upfront. I have googled all over tarnation and cannot find the article that left me with that impression, but I seem to remember (“remember”! I can’t find documentation anymore!) that SIBL as much as said that due to complications in the banking world IT was not able to close on the date that the two participants had agreed upon with SIBL. Hence the extension. Now, all I can find is: EMAG Says” received letter from Health Systems indicating Stanford International Bank will not provide funding to consummate transaction at this time” which is sort of BLEAK since nothing I can find right now in the chatter confirms that SIBL is still committed. They may have had to pull out on their commitment. Completely. It seemed I had the impression that SIBL had recommitted, or extended the timeframe so they could commit. Can no longer find anything like that. It was not wishful thinking on my part, since I was only marginally interested in this deal. I think, though, that news pieces get pulled/replaced by new ones.

I would like to hear at this point from EMAG/Health Systems about the financing, some sort of reassurance on the financing. Either some reassurance from SIBL or from EMAG/Health Systems that they are seeking financing elsewhere.

The $9 million earnest deposit at this point does not guarantee a deal. Seems they NEED a bank to help them through this process, they can’t do it on their own. Rather than lose the 9 million (I think they do really want the deal) they would just extend it AGAIN to find financing. That’s why I would like some sort of communication on it from SIBL.