SGRP - SPAR Group. Takeover offer of $2.50 by Highwire Capital. At current px of $2.13 = 17% spread.
SGRP in its most recent 10Q reiterated their expectation of deal closing by year end (Outside date for the deal is 30 May 2025).
Approved by shareholders. Highwire Capital confirmed financing earlier this month.
Over the last week, SGRP has traded down but I'm unable to find any news that might have been the reason for this. Does anyone with more experience in merger arb situations have a few on this matter?
Potential Issues
Acquirer doesn't have a track record, new company.
1 Director has been constantly selling shares since the announcement - However he also has been constantly paring down his position since the end of last year
Delay in closing - However even using the outside date, the annualized return will still be close to 30%.
Does anyone have any insights into what I might be missing? Thanks
