Adding some WYE today. Let’s play the gap.
Mar.17, 2009 in
Mergers and Acquisitions
Ok, so I am buying a position in WYE for my simulated portfolio today. Entry price: $42.87.
Here’s the number crunch:
Deal terms: $33 cash plus 0.985 shares of PFE per share of WYE.
Entry price of WYE: $42.87
PFE today: $14.26
Deal says I get: 0.985 * $14.26 = $14.046 per sh of WYE plus another $33 per sh of WYE, or $47.046.
Gap: $4.176 sh or 9.74% ROI.
Risk factor: PFE stock tanks at time of deal close. The $33/sh safety net is nice though.

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