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Investment Banks and Takeovers question


Zorrofan
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For those of you more familiar with SEC regulations my question is can an investment bank be used to build a stake in a company, in order to avoid having to file when you have a 5% or greater position. For example JP Morgan bought the shares of ICO from Fairfax and Ross at $7.35. Now these shares could be sold into the market slowly as prices rise but could a company like MEE use JPM to build a larger stake on the cheap before announcing a takeover? JPM could have bought a larger stake - as volume was quite large - and then turn around and sell it to MEE. JPM pockets a nice profit and MEE builds a larger stake in ICO at a price less then the ultimate takeover price. Now I am not saying that this is happening but the recent activity and rumours with MEE & ICO got me to thinking about takeovers in general and wondering if this was possible, if it is used much etc......

 

cheers

Zorro

 

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