Patriot Capital Funding Inc. (PCAP) is being bought by Prospect Capital Corp. (PSEC).  Another all-stock deal.  I’ll get 0.3992 shares of PSEC for each share of PCAP.   It is supposed to close in October, so my money turn over on this one should be quick.

Crunch:

Buy 1 share of PCAP today (9/21/2009) for $3.89 and, when the deal closes, today’s price of $10.26 for PSEC would equal $4.10.  Meaning, the arb gap is $4.10 - $3.89 = $0.21, netting 5.4% ROI.  Annualized, if this turns around in one month, that’s a nice return for me.

If I enter this, it will be around $3.89 today.

Sources:

Reuters