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Strategies & Market Trends : Arbitrage Plays -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (129)	12/21/1999 1:33:00 PM
From: Paul Senior	Read Replies (1) \| Respond to of 376

And I'll take just a little more CG this morning. Stock is up 4 today to about 62. They've rejected a buyout bid from NI for $74 cash and have been seeking other alternatives. Today, a Reuter's story (link below) reports that CG says other suitors have indicated they are willing to pay more than $74. Two drawbacks for stockholders that I can envision with any forthcoming deal that CG might accept are: 1) the time delay in getting the deal through the many government regulators (assuming the deal actually does get approval), 2) the uncertainty of how the deal would be perceived by the market if the higher offer is all stock or a combination of cash/stock (which I'd guess to be likely). Offsetting this are two strong positives: 1)CG's too far into it, there are apparently several suitors (they all know they have to do something better than $74 cash)---so there will be a deal coming out of it that CG BOD will approve; 2)from 62 to 74 or more--that could be a 20% return, if it goes, even if it does take a year to complete (if someone could hold on -g-). I'd also guess there might be some opportunity for a further pop in CG stock along the way- day of deal announcement, day of key regulator approval, etc. Possibly the stock will retreat somewhat with lack of news as the deal progresses. I'll wager (a small amount) that the stock stays about current level then rises. biz.yahoo.com