In my opinion the lid is on until the offer is clearly sunk....

In my opinion the lid is on until the offer is clearly sunk. Although... it could well already be. The offer requires unanimous support from the boards of both companies. And the board of Skilled have already criticised it as opportunistic and under-valued.

I think it's reasonably clear that the big downward drive was conducted in preparation for the offer; so that a low offer could be portrayed as a premium on the current (at that time) price.

Now that the offer is in the open, there's no point maintaining the downward pressure, so the price has rebounded.

But while there's a chance that the deal could go through there's a cap. If the offer goes through, the shares will be valued at $1.38, so paying more isn't going to be very attractive. If the dump was driven by borrowed shares sold short, then the shorter has a good opportunity to cover their position at the present price before the merger offer goes under.

So my feeling is for strong upside through either a revised offer, or dropping the offer.