Forum Archive Index - May 2004

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi david,
 
> 
> I see wri trading at $1.39 & takeover offer at $1.50
> Surely a good play at 10c per share profit to onsell to Norgate
> 

It is only a partial takeover offer.    Norgate only wants 50.1% of the 
shares.     So yes it is a good arbitrage play IF the Norgate offer is 
successful and IF you can get all of your shares away to Norgate.  But 
those are two big 'IF's.

I think what Mr Market is saying here is that if you buy shares at $1.40, 
then half might be sold to Norgate at $1.50, while the ones he doesn't 
want are likely to slip back in price to $1.30.     That is not an 
unrealistic representation of what might happen, and would leave you 
square if you bought shares on the market at $1.40.

The other option is that the Norgate bid fails and he seeks to divest his 
stake, probably at a discount to the $1.45 he bought in at.    $1.40 
could be on the mark here too.

In short, I don't think there is a free lunch being dished up by Mr 
Market here.

SNOOPY





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Message sent by Snoopy 
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"Stay on the upside of the downside, 
Anticipate the anticipation!"




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