ARBITRAGE FOR THE SMALL INVESTOR Message Board

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Strategies & Market Trends : ARBITRAGE FOR THE SMALL INVESTOR

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To: David K. who wrote ()	11/25/1997 11:58:00 PM
From: Brad Zelnick	Read Replies (1) of 34

A brief look at purt suggests that the deal makes sense for both sides. There are quite a number of unresolved issues, that look like they can be handled. The acquiring co is pvt so cannot get real good peak, they have some rated debt out that has been down graded in response to deal. The return on investment is as you promise. Questions include time and risk. Note that a purt subsidiary has small of residual stock out, but they have a $7 offer on the table (prev offered 2 shares for 1). Do you happen to have a price on the 11% senior subordinated bonds of the subsidiary? Their price could be a clue, and could provide a safer vehicle. The Graham formula is Annual Return= CG-L(100%-C)/YP C=expected chance of success L=loss in event of failure Brad

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