Re: Altera corp
At the perception risk of 'talking my book'- acquired a position on Full Disclosure Trading thread here- this merger has kept a fairly wide spread since confirmation of the final deal by the parties June 1st. I assume this is mostly due to time risk (may close after year end and we all know arbs, hedge funds, etc. need those annual results) and some regulatory risk esp. given they needed not just US regulatory approval but also a few key countries including from EU group, China, etc.
Altera's Form 8-K SEC filing Tues. before Open indicated 'The expiration of waiting period under the HSR Act satisfies one of the conditions to closing the acquisition. The acquisition remains subject to other customary closing conditions, including receipt of approval from Altera stockholders and other regulatory clearances'
I would expect the shareholder merger vote to easily pass October 6th and the various remaining country approvals to fall into line sometime thereafter.
I bring it up here only to point out that an investor today may still earn a decent sized spread ($54 cash on merger date versus current price 50.35 = 7% plus an $0.18 div each quarter it doesn't close, ie while you wait for what is likely a 4 to 6 month time frame.
Are there any certainties here and is this investment advice? Oh mon ami certainly not! Do your own due diligence, we must all make our own investment decisions based on our unique circumstances and perceptions of risk/value, etc.
While some folks use certain option strategies to tease out additional returns I am finding that relatively safe merger plays can be a decent source of return if one is willing and able to, for example: wait out any broad market declines that effect your deal by association say if it were part of a large Semiconductor weighted index that starts with S and ends in X but sure aint sex; possibly take a blowup from time to time for instance or become a long term investor; stay away from any use of margin/leveraging; use a variety of risk avoidance techniques such as prudent bankroll, scaling in, position sizing that makes sense, etc. Good fortune to all!
RO |
