Osmium scores with Answers.com …

February 4, 2011

Like most Q&A sites on the Web, Answers.com strikes us as a strange sort of cross between Wikipedia, Facebook and those guys playing trivia games down at the corner bar. On a recent visit to the website, we learned the relationship between the Chinese and Japanese zodiacal calendar, and scrolled through acres of obscure automotive questions and what looks like legions of students trying to cut corners on school papers.

But when it comes to investing, sometimes good timing is at least as important as having the right answer — a lesson driven home when we looked at the Schedule 13G filed on January 12 by Osmium Partners. In it, the San Francisco investment company disclosed that it and its affiliates had acquired 407,865 shares of Answers Corp. (ANSW), the parent of Answers.com, as of Jan. 10.

At the time, Answers’ stock was trading around $8 a share. Yesterday, Answers announced plans to be taken private by Summit Partners for $127 million cash. That’s $10.50 a share, or close to a 30% premium over the price when Osmium filed its Schedule 13G.

Of course, we don—t know quite when Osmium picked up its stake in Answers, or what its cost basis was. (We doubt you—ll find that on Answers.com, somehow.) Judging from Answers Corp.’s stock chart, it might well have done considerably better than the figures above suggest, if Osmium picked up those shares over time.

That SC 13G looks like a new disclosure — triggered, presumably, by crossing the 5% reporting threshold — and there’s precious little additional information about its holdings. Our friends over at Insider Score show no 13F filings for Osmium or its affiliates to shed light on the matter, and just one other holding for which there are any recent filings at all: a $7 million stake in Insweb (INSW), an online insurance market, as of November 2010.

Of course, by yesterday evening, Business Insider was reporting that at least a few of the company’s big shareholders are balking and pushing for an auction. Stay tuned.

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Plus: On January 14, we sent FootnotedPro subscribers our Top 10 M&A targets for 2011 — and barely 10 days later one of the companies on our list, Smurfit-Stone Container (SSCC), announced that it would be acquired by Rock-Tenn (RKT). Now, it turns out, some of Smurfit-Stone’s big investors are unhappy with the proposed terms. The deal on the table was a hefty 35%-plus over the price at the time we issued our report. We’ll see if shareholder resistance drives the price up further.

Image source: Osmium pellet from Wikipedia

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