More than 20 million shares traded in 1.5 hours

After 1.5 hours of trading, already more than 20 million shares have been traded. Theoretically this is more than 10% of total ordinary shares, and it is very likely trading will continue with high volume for the rest of the day. The big question obviously is who is buying, and who is selling. My guess would be that the sellers are speculators who are pleased with their short term profits, and who feel that the potential additional profits do not compensate for the risk of the deal collapsing, which could lead to a significant drop in the share price of CE. Obviously it is unlikely that these were shareholders with a great sense of loyalty to current CE management.

Buyers must either believe in the Staples deal or in the Lyreco deal. Since I believe that most of the price action in CE shares lately was based on speculation that Staples would increase their offer, I believe it is speculators who favour the Staples deal who are doing the buying.
The fact that the price has increased to the EUR 8.90-9.00 range is however a little confusing. These prices only reflect a discount of 1.6%-2.7% to the offer price, with about a month to go before the deal would close. These discounts look fine for a deal which has full support from both companies and has no regulatory issues, but in this case the fight is not over, and it is a hostile deal in the eyes of CE management. I suspect therefore that it is now insiders buying, who are more interested in making the deal happen than in being properly compensated for risk. The reason I think this at this stage of the game is the following text in the Staples news release:

"Staples Acquisition B.V. confirms that it shall waive the Minimum Acceptance Condition to the Offer set out in section 6.5.1 of the Offer Memorandum if and when prior to the Acceptance Closing Time there have been tendered for acceptance under the Offer such number of Ordinary Shares, including Ordinary Shares represented by ADSs, Preference Shares and Bonds that the votes attached to those securities, together with the votes attached to the same types of securities owned by Staples Acquisition B.V. and/or any of its affiliates at the Acceptance Closing Time, represent at least 51 percent of votes attached to the Ordinary Shares, including Ordinary Shares represented by ADSs, Preference Shares and Bonds issued and outstanding at the Acceptance Closing Time."

Given that the share price of CE is below the revised offer price, Staples is allowed to buy shares. With the demonstrated determination they have to acquire CE, and the lowering of the minimum acceptance condition, it seems logical that they are now an aggressive buyer of CE shares. I would not be surprised if we get a notification from the AFM in the next days showing that Staples themselves has started buying, or possibly a party friendly to the acquisition by Staples.

If however the share price increases to EUR 9.15 or beyond, I will be very surprised and confused, and will need to reconsider my line of thinking.