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Gold/Mining/Energy : ARBITRAGE-INTERESTING SITUATIONS

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To: Scott Mc who wrote ()	3/30/2000 3:14:00 PM
From: Conky Lives!	Read Replies (1) of 60

Here's a possible low risk situation that might develop after April 5: Background: TSE:LGS.A is in the process of being taken over by ibm for $19.00 CDN cash. It is currently trading at $18.85 CDN and really not worth buying because of the very small return i.e $0.15 per share 20-30 days. Also, there is a possibility that the takeover offer is unsuccessful. Note: the deadline for tendering is April 5, 2000. The Play: On this day, expect ibm to announce that the takeover has been successful (probably after market closes), that they've acquire over 90% percent of the shares, and that they will acquire the addition 90% under the compulsory acquisition provisions of the Canadian Business Corporations Act. This means that there is no risk. If you have shares you will receive $19.00 for each share. After April 5, 2000 the price MAY drop. And if it does, the stock can be acquired (although the trading will be very thin), for a possible return of 2-3% in up to 30 days. You buy it and they will take your shares from your account and give you the money. Most brokerage firms will not charge you a commission in the circumstance in which a company acquires and pays for shares in your account.

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