Lakeside Steel Inc. (CVE:LS) (PINK:LKSSF) gapped up and ended the session with a 22.7% increase in price on Wednesday after the company confirmed an acquisition agreement under which the business will be sold.
The trading volume was a massive 23.6 million, which was the heaviest recorded over the past three years. It was more than 20 times higher than the 90-day average of 1.3 million.
The stock gained more ground after Lakeside announced to have executed an arrangement agreement with JMC Steel Group Inc. The deal was made through subsidiaries. It defined the acquisition of all the outstanding stock of Lakeside at $0.2983 per share. The whole amount, which sums up to $57.8 million, should be paid in cash.
Once acquired, the company should get a secured loan for up to $50 million. The deal remains a subject to court approval and other customary conditions. It should be closed in the second quarter of 2012.
The stock price was reacting since an arrangement agreement was first made in December 2011. The current price still allows for some modification at it’s a couple of cents off the offered one. However, this doesn’t mean there will be more profitable opportunities for traders other than scalping. In any case, bulls had their chance to cash in while the deal was not yet finalized.
