Following Tuesday’s announcement that Viking Systems Inc. (OTCBB: VKNG) would be acquired by CONMED Corp. share price in the developer, manufacturer and marketer of 3D and 2D visualization solutions for complex minimally invasive surgery shot to a high of 0.2645,a significant bounce from the 0.1895 at which they closed last week.
Activity has been steady for VKNG on Wednesday with share price displaying little variation as the day’s low has been 0.2632 while their high has reached 0.2645 while volume has topped the 2.6 million mark, not quite the 12.3 million it hit yesterday but well above their 50-day average of 359,928 and 200-day average of 180,622.
It should come as no surprise that VKNG’s share price has held firm in that range as CONMED, a surgical equipment maker, will be paying 0.27 in cash for each share, placing the deal around $22.5 million when including in-the-money stock options and warrants.
Coinciding with the announced acquisition was the release of VKNG’s second quarter results which produced sales of $2.2 million for the three month period ended June 30, 2012. That figure was an 11% dip from the $2.5 million recorded during the same period one year earlier.
While sales fell VKNG did show an impressive growth in gross profit for the quarter, jumping from $385,000 or 15% of sales reported during the 2011 second quarter to $433,000 or 20% of sales during the 2012 second quarter.
As for what’s left for investors there is still the matter of the approved deal with CONMED Corp. actually closing, something expected in the fourth quarter. There is still the potential that something could prevent that deal from going through as there is an investigation of VKNG’s Board of Directors for possible breaches of fiduciary duty and other violations of state law in connection with the sale.
According to a press release issued by the law firm of Levi & Korsinsky, LLP the investigation “concerns whether the Viking Board of Directors breached their fiduciary duties to stockholders by failing to adequately shop the Company before entering into this transaction and whether CONMED Corporation is underpaying for Viking shares, thus unlawfully harming Viking stockholder.”
Whether or not this investigation amounts to anything is yet to be seen but there could be investors betting on either side of the outcome.