Small Cap Stocks To Watch - KCG, RMCF, MAGS
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Knight Capital Group KCG 3.33, along with GETCO Holding Company, LLC, Announced Tuesday after market close that they have entered into an agreement for a strategic business combination whereby GETCO and Knight will be combined under a new publicly traded holding company.The combined firm will create a true industry leader as an independent market-maker and agency broker across geographies, market structures and asset classes.The resulting company will benefit from Knight's deep customer franchise and GETCO's leading edge technology platform, resulting in a company extremely well positioned to serve customers across multiple products globally.
Under the agreement, existing Knight shareholders (other than GETCO) will have the right to elect to receive 3.75 per share in cash or one share of common stock of the new holding company. The cash consideration will be subject to pro-ration if the holders elect to receive more than 720 million in cash in the aggregate. Jefferies & Company, Inc. and its affiliates, the largest shareholders in Knight, have agreed to limit their cash election to 50 percent of their Knight shares to the extent it is necessary to ensure that other Knight shareholders can receive their desired cash level up to the 720 million dollar aggregate amount.
GETCO members will receive 233 million shares of the new holding company and the 57 million shares of Knight currently owned by GETCO will be retired. GETCO members will receive warrants in the new holding company as follows: 25 million warrants with a 4.00 exercise price and a four-year term; 25 million warrants at a 4.50 exercise price and a five-year term; and 25 million warrants at a 5.00 exercise price and a six-year term.Based on the tangible net worth of GETCO and Knight as of September 30, 2012, pro forma tangible book value of the combined company would be approximately 3.75 per share.
What They Do: Knight Capital Group is a global financial services firm that provides access to capital markets across multiple asset classes to a broad network of clients, including broker-dealers, institutions and corporations.
Rocky Mountain Chocolate Factory RMCF 10.60. Today announced that it is aware of a Schedule TO filed with the U.S. Securities and Exchange Commission (the "SEC") by PST Capital Group Ltd. ("PST") after the close of market trading on December 18, 2012.The Schedule TO claims that PST has made an offer to RMCF's Board of Directors (the "Board") to acquire all outstanding shares of RMCF's common stock for 13.50 per share (the "Offer").
There are numerous issues that RMCF has discovered with respect to the Offer.First, while the Schedule TO claims that an offer has been made to RMCF's Board, in fact RMCF previously received an unusual letter from PST addressed to RMCF's shareholders (the "Letter").The envelope in which the letter was received was handwritten and addressed to RMCF's Chairman of the Board, Franklin Crail, though Mr. Crail's name was misspelled as "Krail".Furthermore, the return address listed a well-known law firm.However,this law firm confirmed by email that they do not represent PST.Finally, Internet searches for PST and the contact person listed in the Letter returned no information, and the address for PST listed in the Schedule TO appears to be to Speedy Parcel Post, a mailbox and shipping store in London.Similarly, Internet searches for the legal counsel listed on the Schedule TO, William Hogan of Lauby & Hogans LLP, returned no information.The address listed for the law firm appears to be a Pacific Mail mailbox store in Irvine, CA.
What They Do: Rocky Mountain Chocolate Factory is an international franchiser of gourmet chocolate, confection and self-serve frozen yogurt stores and a manufacturer of an extensive line of premium chocolates and other confectionery products.
Magal Security Systems MAGS 3.99. Today announced that its major shareholder, the Kirsh Group, which is controlled by Mr Natie Kirsh, has acquired the entire shareholding of the Even Ezra family at 5.00 per share, a 26% premium to Magal's closing share price on December 14, 2012. This brings the Kirsh Group's holding in Magal to 44.4%.
Mr. Kirsh said, "I have been involved with Magal from the beginning. This additional investment demonstrates that I remain a long term supporter of the company as well as my belief in its future. The management team has done a fantastic job of navigating the business through difficult times for the global economy. They are a very capable group and this transaction is an investment in their ability. I look forward to witnessing more accomplishments from the team in the years to come."
What They Do: Magal S3 is a leading international provider of solutions and products for physical and cyber security, safety and site management.
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