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| Subject: OT: arb | Date: 7/2/2020 10:11 AM | |
| Author: mungofitch | Number: 278266 of 280657 | |
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A little merger arbitrage opportunity. One of my holdings, BPY, has just had a tender offer for a fixed $12. It's trading at $11.27 now (changing fast), up from yesterday's undisturbed $10.20. You could buy 'em now, tender them all, and make $0.72 per share = 6.5% fairly quickly. The only way this is not free money is if the tender offer is oversubscribed, in which case you sell only a pro-rata fraction of the shares at $12, and get "stuck" with the rest. I own a very large number of shares in this. I think they're probably worth closer to $20, and won't be tendering any, but others have differing opinions. Still, getting "stuck" with some of the tendered shares from the arb probably isn't so bad. They own a lot of offices and malls, which are not exactly in fashion right now, to say the least. The malls are very good ones and were purchased at a big discount, but (with hindsight) not big enough. They have a preposterously massive dividend yield of 13.5% that most people assume will get cut. But they have a very rich parent company, the source of the tender offer, so it might not. Jim |
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