The Battle at Ebix

There’s an interesting battle going on at the company Ebix ($EBIX). Goldman Sachs recently offered to buy the company for $20 per share and the board said yes. Some shareholders are fighting back claiming the price is far too low. I have to agree. The price is too low.

Even putting the valuation argument aside, there should be far greater pushback from investors on these types of mergers. I don’t believe the majority of acquisitions are to the benefit of shareholders (for either party). The Sprint-Dish merger seems to be an obvious mistake. With Ebix, they have to wait 45 days for a counter-offer. I doubt one will come. Who wants to piss off Goldman?

The Ebix story gets more interesting because the company is being investigated the SEC due to “accounting issues.” Yeah, that’s not good.

Interestingly, the first event that took down shares of Ebix was a posting at Seeking Alpha two years ago under the name Copperfield Research. Since then, it’s been one long headache for Ebix. There have been accusations and denials, and I can’t keep it straight.

Sorry to sound conspiratorial, but this sounds like a good time for a board to sell out at any price. If Ebix is private, then who cares about their accounting, right? My assumption is that Goldman is a lot less dumb than they are evil.

Posted by on May 7th, 2013 at 3:56 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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