A lesson to acquisition-minded brokers: Don't make an offer that your prospective purchase will find insulting, and whatever you do, don't bug them about it.
The board of directors of Dallas broker-dealer SWS took obvious glee in formally rejecting a $200 million takeover bid from Birmingham, Alabama firm Sterne Agee for being "unsolicited, highly conditional, and opportunistic."
We dissected the offer Friday morning as offering a dismal 2% premium on SWS' stock price and a 44% discount on its book value.
Unless SWS was effectively facing terminal distress in the near term -- a sudden balloon payment on debt or some other looming disaster -- the deal made no sense.
SWS management agreed, arguing that they see far more upside in the stock and the underlying business than Sterne Agee is offering them.
Furthermore, they rebuked their would-be buyer for pestering them about the deal:
"We do not appreciate the distracting, interfering, and unprofessional communications from Sterne Agee employees to SWS Group employees regarding this proposal, and respectfully request that those communications cease immediately."
In other words, not only are we not dating, but stop calling us.