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http://boards.fool.com/a-bank-merger-that-caused-confusion-12294906.aspx
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| Subject: A bank merger that caused confusion | Date: 3/28/2000 5:16 PM | |
| Author: GPSpilot | Number: 4 of 4 | |
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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) ? |
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