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Biotech / Medical : ARRIS - Another partner -- Ignore unavailable to you. Want to Upgrade?

To: Miljenko Zuanic who wrote (309)	12/9/1997 9:09:00 AM
From: Biomaven	Read Replies (2) \| Respond to of 353

Miljenko & others: Here's one possibility as to why Arris shot up on the news of the complaint about the merger: When the merger was announced, there was a mismatch between the relative prices of ARRS and SQNA compared with the terms of the merger. This caused arbitrageurs to buy SQNA and short ARRS. Once there was some doubt about the merger, the shorts covered, not wanting to have a naked short position. However some doubt is cast on this theory by the fact that SQNA went up as well (but not proportionately by quite as much). If it was a pure arbitrage move then SQNA would have dropped. The other possibility is that the selling pressure from the fund's reduction in holdings ceased, and people thought (as I do) that Arris looks cheap, with or without SQNA. Peter