"United States Steel Corporation (X) is buying Lone Star Technologies (LSS) for $67.50 per share in cash or total consideration of $2.1 billion, a premium of approximately 39% to Lone Star's closing share price of $48.45 on March 28, 2007."
Lone Star is the last man standing with Maverick Tube, National Stainless, Hydril having already been purchased. These companies serve the oils services sector making tubing and other things needed to outfit drilling. I have owned them all.
Being so familiar with the industry and understanding the consolidation happening, I'm kicking myself a bit for not having a position in LSS. LSS was the weakest of all of the sisters, but one needn't be a rocket scientist to see the good probability of takeover. Simply put, they fell off my radar screen.
If I've come to learn anything is that your radar screen is your best friend--particularly when you have invested time in learning about companies as I had with this group. I made really good money off of them because they were a little known segment of the oil services. No one was talking about them, but I researched the segment and realized that they all gained through servicing all of the drillers. I also lost alot of money because I had call options that bit the dust, when the oil services sector tanked. Easy come. Easy go.
Companies fall in and out of favor. All of these tubers fell out of favor (to my dismay!). I remember Tim Knight having HYDL as a short and I warned on the consolidation in the industry and that I thought a short was risky. There is a place for fundamentals.
The second lesson, is that when stock become really really treat, they are in the bargain bin, not only for investors, but for potential purchasers. That happened to each of these suppliers over the past year. Cast in the bin--rummaged through and then proudly taken to the register.
The purchase price is just a hair off the all-time high.