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Bought DEC today at 51. Currently, CPQ is bid at 25 5/8, so, I'm getting 25.625(.945)(x) + 30x = 54.215x for each share. (54.215 - 51)/51 = 6.3%.

That's not bad for what I consider a rather low risk arbitrage (certainly less risk here than the MCI/WorldCom merger...)

Plus, there's another nice thing about this particular deal... I think CPQ will see some more price appreciation in the coming weeks as people begin to see that they are really not very bad off and that DELL is perhaps very overvalued. I think DELL is slightly overbought here and CPQ is slightly oversold.

Tim
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