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Message Boards Settings First Niagara Financial (FNFG) - Quote Info
Re: HNBC Buyout     30-Oct-09 10:56 am    
With both companies' EPS reports now out, the market is narrowing the spread between the prices of HNBC and FNFG, a vote of confidence in the merger. Roughly, 211 HNBC shares equal 100 FNFG post merger. I double those share counts to squeeze down the transaction costs to calculate the arb. At yesterday's closing prices, 422 HNBC at 5.75 would have cost $2,435 after commissions. Short 200 FNFG at 13.30 would have a credit of $2,623 after commissions and paying out one dividend for an arb profit of $188 on the transaction.

At this morning's prices of $5.84 and $13.08, the arb profit is $106 for the same trade. That is a significant change in the spread and a vote of confidence from the arbs that this deal is on track to happen at the current merger terms.
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balegoba196...

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  Subject Author Rating Time of Post (ET)  
 
FNFG is buying HNBC in what looks like a done deal...th...
balegoba196... Rate it 2-Oct-09 01:19 am  
 
I like your thought process. Here is a spreadsheet...
bwanajet Rate it 9-Oct-09 02:00 pm  
 
This seems like a great idea. Thanks to you ...
ryanpadgett Rate it 28-Oct-09 04:59 pm  
 
I think you have the tail wagging the do...
bwanajet Rate it 30-Oct-09 09:32 am  
 
Re: HNBC Buyout
balegoba196... Not rated 30-Oct-09 10:56 am  
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First Niagara Financial Group Inc. (FNFG)

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On Nov 25: 13.29 0.00 (0.00%)
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