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Subject:  OT: arb Date:  7/2/2020  10:11 AM
Author:  mungofitch Number:  278266 of 280657

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.

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