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You might as well hold your shares for a little while to make sure another competing offer doesn't come out of the blue. Since the LQI board unanimously approved the deal, the likelihood of a competing offer is not great, but it's always possible.

After that time frame, then I think a primary factor of whether you hold or sell will be your holding period. The deal is supposed to close in first quarter 2006. If you will establish a one year holding period by then, thus ensuring favorable long term capital gain treatment, then your best bet will likely be to hold until you establish your one year holding period.

If you've already got your year established, or if you bought more recently so it's highly likely the deal will close prior to your one year being established, then you can watch the market price. If the market price is near the buyout price, you may want to go ahead and sell to lock in your profits and reinvest the cash elsewhere.

The primary risk of holding is that the deal falls through. I think under the circumstances, that's unlikely. However, we've seen this week what happened to the Guidant buyout by JNJ, in which JNJ pulled out of the deal, citing material adverse changes. Another interesting buyout was announced this week of LNT, at a premium. However, the market price of LNT is still well below the buyout price, reflecting the fact that the buyout is contingent on LNT meeting certain financial conditions, which may be tough to meet, thus increasing the possibility the deal won't go through. I saw nothing like that in the announcement of the LQI buyout, but we'll need to see what the actual deal is before we can tell whether there are any substantial hurdles that must be overcome before the deal can close.

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