Another buyout of a company I own :(

Whenever you hear the news that a company whose shares you own are being bought out and taken private, you usually jump for joy. Not in this case however.

From bizjournals.com:

Valley National Gases (AMEX:VLG - News) is a supplier of industrial, medical and specialty gases and related equipment and is based in Washington, Pa.

Caxton-Iseman Capital, the New York investment firm, is acquiring Valley National's outstanding shares for about $249 million, and assuming the company's debt for a total transaction value of about $312 million.

Under the terms of the agreement, Valley National shareholders will receive $27 in cash for each share they own, which is equal to Monday's closing price.

Valley National will continue to be based in Washington, Pa., but will now operate as a private company.

"We are investing because we believe Valley National is well positioned to expand in its existing markets and enter new geographies through strategic acquisitions and internal growth," said Caxton-Iseman managing partner Frederick Iseman.

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Valley National is being purchased without any premium provided to shareholders. To add insult to injury, as you can see by the chart, VLG has traded $5 higher in the last 6 months. In fact I actually sold half of my stake at $32 this summer because it had more than doubled from my originial purchase price. However, I never would have expected an investment firm to be able to purchase the company at only $27 per share. What a steal! The press release even admits that the company is well positioned for growth.

We can only hope that a secondary suitor comes within the next few weeks to outbid Caxton-Iseman Capital. Two years ago, I owned an oil tanker firm, Stelmar Shipping that received a buyout from another tanker firm. The final buyout price ended up being almost $10 more than the original buyout offer due to disgrunted shareholders unwilling to tender their shares to management. Unfortunately in this case, insiders own the majority of the shares, so we minority shareholders may be screwed. Oh well. I still cannot complain too much on a company who shares have doubled in the last 18 months.