JG's writing taught me to look for special situations. Justadrone mentioned in his blog that LPMA is possibly being acquired. They've announced that there will be votes taken among shareholders mid-September. The risk/reward looks pretty interesting. I guess that this is essentially a situation called risk arbitrage, where the difference between the current price and that of the premium for the merger is the risk that people are willing to pay for. JG says that in most cases, it's pennies and not worth the risk. But in this case, LPMA is selling for $24, but the price if the deal goes through will be $29. That seems almost too good to be true. I've started looking through the latest SEC filing that I could find. As far as I could tell, there are two reasons that the deal might not go through 1) the shareholders will vote against it and 2) there will be some sort of antitrust situation and the acquisition will not be permitted to go through. I will still look into this further, but the premium is pretty large. It might just be worth it. We'll see.
2 comments:
Jamie, not sure if you saw my blog on LPMA (under Better Half) but it is a good investment at the current price. I have also read through the documents and $29 seems like a real option.
MG
Added note - I increased my LPMA by 60% today, getting in at $24.92. I knew PAY (the buyer of LPMA) was announcing earnings tonight and wanted in before that announcement.
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