Funny to see how clueless some of these posters are. One thinks, this will be $60 in december, one thinks it will still be trading in 2022 or even get a higher premium, another clown thinks they are still trying to steal your shares on the bullboard and another think there will be a competing offer. Just unbelievable, how clueless these clowns are. Such nonsense. SCR play is done, the takeover is signed, sealed and delivered. It will be delisted once the takeover is done. This guy at motley fool must have read my post here and stole my thoughts. Lol. Exactly what I said.
Score Media and Gaming (TSXV:SCR)(NASDAQ:SCR) had a swift and astonishing rebound yesterday. After losing nearly roughly 64% of its value from February, theScore stock jumped 70% yesterday after an acquisition deal was announced.
For many long-term investors, this deal validates their conviction in the stock and cements their profits. It also presents an opportunity for traders to make a quick buck. Here’s a closer look at the acquisition deal and what this means for theScore’s stockholders.
theScore stock details
Pennsylvania-based casino giant Penn National Gaming reached out to theScore with a buyout offer yesterday. The deal is worth US$2 billion, or CA$2.5 billion — much higher than what theScore stock was worth just a few days ago.
However, the deal isn’t all cash. This means investors and stockholders need to take a closer look at the fine print to figure out how to maximize gains. The deal offers US$17 (CA$21.33) in cash per share and 0.2398 shares of Penn’s common stock for each theScore share.
When the deal is completed, theScore stock will be delisted. Shareholders will be given the cash and Penn stock as planned. However, Penn stock has already jumped because of the announcement. It’s now trading for US$72, which means 0.2398 is worth roughly CA$21.7 in cash. Put simply, the combined value of the deal is $43 per share currently.
However, theScore stock is currently trading for just $40.8 at the time of writing. That means shareholders have little more room for upside. It could also be an opportunity for traders to make a quick buck via arbitrage.
Arbitrage
Arbitrage opportunities in merger and acquisition deals are not uncommon. However, most of these opportunities are small, rare, and fleeting.
At the moment, it certainly seems like theScore stock offers a chance to make a tiny profit. Traders could acquire the shares at market price — $40.8 — today. When the deal is completed, they can sell Penn stock to capture roughly $3 in profit. That’s a return of roughly 7%.
However, for this strategy to work, Penn stock needs to either remain stable or appreciate by the time the deal is completed. Traders will also have to account for currency conversion and taxes along the way.
Bottom line
Penn’s offer to buy Score Media and Gaming is the ideal rescue deal. It helps Penn gain access to the popular Score app and media assets, while bailing out Score stock investors who’ve been losing capital throughout the year.