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Strategies & Market Trends : Arbitrage Plays

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To: Keith J who wrote (179)	2/17/2000 12:44:00 PM
From: Allen Furlan	Read Replies (2) of 376

Keith, re mre and king. Highly likely to be completed by end of this month with exchange ratio between .65 and .68 Average price for 16 days for king has been 52.54 and 4 days to go on 20 day average setting price. If king stays at 40 the 20 day average will be slightly above 50 and the exchange ratio at 50 is 34/50=.68 Interesting plays on options since king options are too high relative to mre options. My own selection was buy 6 mre July 30 and sell 11 king July 70 with $300 out of pocket. Leveraged position which goes bad at king=83. You can construct riskless position but potential return will be lower I still have a gut feeling that ctz buyout will be negotiated upward from current adjusted basis. If so this will be good play. Board of ctz negotiates and they have their own shares on the line(700,000). FNF CEO has a lot of ego on the line so I think deal will not be permitted to fail. Can sell fnf calls a a hedge.

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