How do we calculate possible effect on value & ROI of the upcoming Agilent dutch auction?
I'm trying to decide what to do with my 38 shares of Agilent (A), whether to tender them for the upcoming dutch auction or not. We only have a few days to decide.
Given an investor who bought 100 shares of HP at $55 (currently HWP) in August of 1998; and given the subsequent June 2000 spinoff, 38 shares of Agilent were produced from those 100 HWP shares with a cost basis of
22% x $55 = $12 per share for the A stock (I think).
Today, given Agilent has 500 million outstanding shares and given the roughly 15% repurchase (73 million shares) at $32 to $37 per share; and given the current price of roughly $35 per share, how do we calculate the shift in value from the $2.7 billion repurchase and subsequent stock valuation?
I'm confused about whether or not to tender my 38 shares of A to this dutch auction due to my inability to ascertain what the expected value & ROI would be of selling them vs keeping them.
I'm guessing any one share will be worth 115% more than it is today due to the repurchase. At today's prices, that makes its value about 1.15 x $35 = $40. And, I'm guessing my current ROI if I were to tender them at $35 would be 27$ per year since 1998.
Does this mean that the expected calculated rise of A will be to $40 the day after the dutch auction completes?
I'm so confused - Please help me understand the mechanics better, Karin
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