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

To: Keith J who wrote (225)	5/18/2000 4:35:00 PM
From: Allen Furlan	Respond to of 376

Keith, re aco. Looking more carefully at prospectus, I decided to close out my position. Bought 2000 at 16 on Monday after announcement and closed out all at 16 3/4 and 16 7/8. The residual company appears to have little in the way of immediate prospects which bodes poorly, could well be under 3. Took new position in mcn being bought by dte. Logical strategic fit for 2 Michigan utilities. According to IR only ftc need to approve. I guess Michigan PUC not in picture. Stock fell to 20 1/2 intra day this week when utilities were Greenspanned. Now back to 22 1/2. MCN had poor earnings and this spooked many players. Deal is for 55% cash and 45% stock. Cash at 28.5 and stock at .775 Assuming rational behavior the cash electors should get 15.67 plus .348 dte or 27 plus at todays price of dte. I sold covered Nov 25 calls and expect them to be exercised by any holder who want the more favorable cash election. Therefore you squeeze out the time premium in less than 6 months. Are there any other arbitrage positions you like now?