MARKET TALK: Not All Arbs Bailing On H-P Deal
11/06 4:34 PM (DJ)
Story 8185 (CPQ, HWP)
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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4:34 (Dow Jones) Many arbitrageurs bailed out of their bets on Hewlett-Packard's (HWP) planned acquisition of Compaq (CPQ) after the Hewlett family said Tuesday it would vote against the merger, sending the deal's spread as wide as $4.50, compared to $1.72 before the news. Others arbs saw that as an opportunity to put on fresh bets. The thinking goes that, with a spread at about $4, the downside would be limited to 50 cents, assuming the spread won't widen beyond $4.50, says one arb at a hedge fund. Meanwhile, the upside if the deal gets done is a whopping $4. Arbs considering that risk-reward scenario are piling on fresh positions, he says. "Volume is really heavy, but it's hard to tell who's putting on and who's taking off." (JAW)<
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>END) DOW JONES NEWS 11 -06 -01
04:34 PM |
