Viterra – Another Transaction Verifying Model Price

Glencore just announced the acquisition of Viterra for CDN $16.25 per share.  On March 8, 2012, before talk of a transaction, VT closed at $10.98 and model price was $16.32.

Viterra with weekly price bars, EBV Lines (colored lines) and model price (dashed line)

Interesting sidebar since convexity of Viterra is 1.95, model price increased from $16.32 to $18.66 because of the price movement of the stock price subsequent to the announcement that suitors were interested in purchasing the company.  This is a small example how an increasing stock price helps the valuation of the enterprise as a whole.

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