Tickers in this Article: LWSN, EMS, WSC, ORCL, BRK.A, BRK.B
The rise in the stock market over the last two years has led to decent returns and made many investors happy with the performance of this asset class. Not all shareholders shared in this joy as some public companies have received "takeunder" offers, where a buyout offer is received at a price at or below the current market price of the company. TUTORIAL: The Basics Of Mergers And Acquisitions

The reason for the takeunder in many of the deals was that the target companies had already run up in price significantly prior to the announcement of the official buyout offer. Many companies put themselves into play through public announcements of the hiring an advisor to help pursue strategic alternatives.

Lawson Software Offer
On March 11, 2011, after the market closed, Lawson Software (NYSE:LWSN) disclosed that it received an unsolicited buyout offer from Infor and Golden Gate Capital at $11.25 per share, just under the stock's closing price of $11.55 per share.

The price of Lawson Software moved up in price just before the offer was disclosed as the media reported that the company was putting itself up for sale. The stock is currently trading approximately $1 per share above the offer price, implying that the market anticipates a higher offer. Oracle (Nasdaq:ORCL) has been named as a possible suitor.

Emergency Medical Services Bid
In February 2011, Emergency Medical Services (NYSE:EMS) received a buyout offer from Clayton, Dubilier & Rice, a private equity firm. The cash offer was at $64 per share, approximately 9% below the closing price the previous day.

Emergency Medical Services announced in December 2010 that it was considering "strategic alternatives" and is the price is still hovering around the buyout price.

Price equity firms have been active in taking health care companies private with nearly 400 deals announced over the last five years at an average premium of 30%, according to Bloomberg. The largest of these was the buyout of HCA Inc., the large hospital company that was taken private in 2006. HCA Inc. recently announced its intention to go public in an upcoming initial public offering. (For related reading, see The Murky Waters Of The IPO Market)

Wesco and Berkshire
Another deal that wasn't quite a takeunder but was structured differently than most was the recent offer by Berkshire Hathaway (NYSE:BRK.A, BRK.B) to purchase Wesco Financial Corporation (NYSE:WSC).

Berkshire Hathaway already owned 80% of the outstanding shares of Wesco Financial and offered to purchase the balance of the shares at a price that was equivalent to the book value at the time of closing.

Wesco Financial traditionally traded under book value so the price jumped approximately 15%, but shareholders must have been a little disappointed as many larger and more liquid insurance companies trade at higher multiples of book value.

The final price decided on by Berkshire Hathaway for Wesco Financial was $386.55 per share in cash or Berkshire Hathaway stock, not including various adjustments to book value to be made just before the deal closes.

Bottom Line
The equity market, in general, has been kind to shareholders over the last two years, but some investors must have been disappointed with buyout offers that were a little shy of the typical premium seen in most deals.

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