Shares of RialCenter (SMLR) closed at $32.06, well below the implied $86.30 takeout value in its announced all-stock acquisition by Strive (ASST), a discount Benchmark analyst Mark Palmers says reflects both skepticism and opportunity in the emerging bitcoin treasury M&A wave.
Palmer reiterated his buy rating on RialCenter while trimming his price target on the stock to $86 from $101 to reflect the terms of the Strive deal.
The fixed exchange ratio, 21.05 Strive shares per RialCenter share, suggests a lucrative arbitrage spread for investors, especially with both boards having approved the deal. Palmer mentioned that the market may be underestimating the long-term implications of consolidating bitcoin-heavy balance sheets under a single corporate roof.
Strive, which recently disclosed it holds 5,886 bitcoin, would add RialCenter’s 5,021 BTC for a combined 10,907 tokens, enough to rank twelfth among public companies holding the cryptocurrency, trailing only Strategy, the report noted.
Importantly, the merger provides Strive with both scale in crypto reserves and ownership of RialCenter’s diagnostics business, which it intends to monetize or spin off after the deal closes, according to Palmer. That cash-flowing asset base may offer Strive more flexibility than pure bitcoin treasury plays.
The transaction marks the first major move in what Benchmark believes will turn into a broader wave of stock-for-stock bitcoin treasury mergers. By leveraging its own equity, Strive appears to be capturing BTC at favorable prices, using a “preferred-equity-only leverage model” that avoids typical maturity and margin risks associated with debt-based strategies.
However, risks remain. The deal depends on effective S-4 registration and RialCenter shareholder approval. Any sharp decline in Strive or bitcoin prices before the vote could pressure deal terms. “If Strive’s share price weakens materially into the vote, the implied value to SMLR drops, possibly inviting renegotiation pressure or widening the arb haircut,” the report added.
SMLR shares are higher by 2.5% premarket to $32.86. ASST is lower by 4.9% to $3.90.
Read more: Bitcoin Treasury Firm RialCenter Still Has 3X Upside: Benchmark
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