Velan Inc (VLNSF) Merger with Flowserve Corp (FLS)
I am long Velan Inc. (VLNSF), a maker of industrial valves, which is being purchased by Flowserve Corp. (FLS) for $13.00 CAD ($9.75 US) per share. The stock in very thinly traded in the OTC Pink market but trades regularly in Canada. It is currently $10.45 CAD ($7.48 US). Investors who purchase now stand to gain 24%, assuming the deal is consummated. Will the deal go through? It has hit a snag with French regulators who don't want the French subsidiary, an important supplier for French nuclear reactors, to be owned by a U.S. company. One example that has been sited was the U.S. could object if the French make a deal to do nuclear reactor work for China. The companies have amended their agreement to move the deadline for completing the purchase by a month to September 7, 2023. In Flowserve's quarterly earnings call on August 2, 2023, the CEO said they were eager to move ahead and confident they could do so. He also said the timeline should be much clearer very soon. I think th...