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Non-Tech : British Pete / Amoco Merger
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To: pae who wrote ()8/13/1998 11:26:00 AM
From: pae  Read Replies (3) of 29
 
Current prices and spread for AN/BP:

AN=48.5625
BP=78.1875
4/6*78.2=52.1
52.1-48.56=3.54

Can anybody explain the 3.5 point discount in Amoco's price relative to conversion to BP? 3.5/78.1=4.5% Perhaps the spread only reflects the cost of capital that would be required to arbitrage the difference and therefore the arb community will go no further to close the gap. Anybody got a better understanding? Thanks to all contributors of substance.
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