Ehi Car Services (EHIC) Stock: Headed Up On Merger News

Ehi Car Services Ltd (NYSE: EHIC) is having an incredibly strong start to the trading session this morning, and for good reason. The company announced news with regard to an amended merger agreement. Of course, the news excited investors, sending the stock on a run for the top. Today, we’ll talk about:

  • The amended merger agreement;
  • what we’re seeing from EHIC stock as a rsult; and
  • what we’ll be watching for ahead. 

EHIC Announces Amended Merger AGreement

As mentioned above, eHi Car Services is having a strong start to the trading session this morning after announcing that it has entered into an Amended and Restated Agreement and Plan of Merger. 

In the announcement, EHIC said that the agreement relates to a merger agreement with Teamsport Parent Limited and Teamsport Bidco Limited. 

According to the terms of the amended agreement, shareholders of EHIC will receive $6.125 per common share owned in cash or $12.25 per American depositary share of the company. 

Each of these represents two Class A common shares of the company, other than Rollover Shares and ADSs paid to shareholders under the Amended Merger Agreement is approximately 9.25% less than the cash consideration payable under the original agreement. Nonetheless, the price represents a premium of 26.9% over the closing price of the stock as of January 22, 2019 and a premium of 22.9% and 19.2% respectively over the 30 and 60 day volume weighted average price. 

What We’re Seeing From The Stock

 One of the first lessons that we learn when we start to work in the market is that the news leads to moves. When it comes to eHi Car Services, the news proved to be positive. After all, the merger transaction will commence at a decent premium. So, it’s not surprising to see that excited investors are pushing the stock up. 

As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (11:02), EHIC is trading at $12.02 per share after a gain of $1.37 per share or 12.86% thus far today. 

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What We’ll Be Watching For Ahead

Moving forward, the CNA Finance team will continue to keep a close eye on EHIC. In particular, we’re interested in following the story surrounding the company’s continued work to close this merger. Nonetheless, we’ll keep an eye on the news and bring it to you as it breaks!

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