value and opportunity

As one of the readers commented yesterday, one of my special situation investment, real estate investment company AIRE KgAA issued a 10% buy back tender offer yesterday after close.

This is of course good news in general, as this was one of the catalyst events I was looking for.

Based on my initial investment thesis from Decemeber 2010, we are currently at the “mid case” scenario.

However I have some isues with this tender offer:

1) Why was it launches just before the publication of the annual report ? Normally, the annual report came out always on the last day of April. Do they want to fix the price now because there is unexpected good news (e.g. a written off project came back to life) ?

2) In my opinion, there was some serious INSIDER TRADING going on. This is the only explanation for the strange rise of the stock against the general market) in the last few days:

The insider aspect really worries me, as this could also go into the other direction. So my current reaction is to start to exit the position from today, even if this is what AIRE KgAA or its major shareholders are trying to achieve.

The tender offer itself is an “Odd lot” type of offer, with the “odd lot” being 100 shares which will be accepted 100%, above 100% there will be only a partial repurchase based on the total amount tendered.