The Motley Fool Discussion Boards

Previous Page

Stocks U / Union Bankshares Corp.


Subject:  A bank merger that caused confusion Date:  3/28/2000  5:16 PM
Author:  GPSpilot Number:  4 of 4

Reuters put out a press release this morning saying that Union Bankshares Corp. was going to buy Mid-Coast Bancorp Inc. (MCBN).

Later they issued a correction. Turns out it was Union Bankshares Company (based in Maine), not Union Bankshares Corp. (based in Virginia) that was buying MCBN.

Anyway, I have a question about all this. Under the terms of the merger, MCBN shareholders will be receiving $15.875 per share. This morning, MCBN was immediately bid up to $14.75 (up from the previous close of $6), and stayed there all day.

My question is, why wasn't the share price bid up to $15.875? Couldn't I just buy a bunch of shares at $14.75, hold them until the merger is complete, then walk away with a fast and certain 7.6% profit (15.875 / 14.75 = 1.076) ?
Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us