RE:RE:RE:RE:RE:RE:RE:I'm Excited!marben100 wrote: I agree with you TC - and that's part of the reason I added to my holding. We had exactly the same behaviour with the SMF merger: EDV sold off hard when that merger was announced (kicking myself that I wasn't brave enough to add @ around C$18 then). However, since that merger completed, the share price hasn't looked back (until the TGZ one was announced!).
This is logical, as merger arbitrageurs may go long TGZ and short EDV, intending to cover their shorts by the EDV shares they receive when the merger completes.
Therefore, I regard this as a buying opportunity, ahead of the merger completing.
Merging with TGZ looks like a great deal to me, for both parties.
Of course, the trajectory of the gold price is important too, but I'm reasonably comfortable with that.
Cheers,
Mark
Hi Mark,
There is no arbritrage here - at least not when i have checked. the other day i went to buy EDV and thought, hey, i'll check to see if TGZ is trading at a discount like SMF was. And again, I just looked at the live quotes again as i type. Both instances had it almost to the penny at the right ratio (EDV was a 7 cent better buy the exact moment i checked today). So abritrage does not exist. There is no gain shorting EDV and covering by TGZ because you are doing it at the exact same price. And abritrage is a sure thing - it needs to be done at the same point in time.
The discount SMF traded at, in my opinion, was that there was some risk the deal would not be approved (maybe not at the shareholder level but they did have get government approval i think - Quebec??). Once approved - the ratio held perfect - no doubt a bunch of computers ensure they can steal a penny here or there if that does not hold.
And as far an silly anecdotal evidence. This is the *first* merger/takeover that posters of the "other" board seemed to think the deal was great from day 1. i even posted so on their board early after the merger. Every other one had the majority of posters (ie retail shareholders) yelling and screaming about being ripped of and how unfair it was (wow - that reminds me of the orange clown) going back to Etruscan and myself saying the same.
My opinion is that the market show that EDV paid a premium - that 0.47 very complimentary to TGZ. Does the bigger fish in a merger always pay a premium - probably unless it's more of bailout than anything else. I think TGZ was overpriced vs EDV / EDV was undervalued vs TGZ the day before the merger was announced.
Ha - and before some posters start jumping up and down like monkeys, it can simply mean that TGZ got the better deal of a good deal for both companies. at least that's how an optimistic EDV holder has to look at it....will my shares be worth more a year from now combined vs a year from now without the merger.
https://schrts.co/NKuATwwC
apologies for the novel
tC