Showing posts with label ROH. Show all posts
Showing posts with label ROH. Show all posts

Wednesday, October 29, 2008

Arbitrage Opportunity?

Rohm & Haas Co. (ROH) shareholders approved a deal with Dow Chemical (DOW). The offer is apparently going to be an all-cash deal, although there is some risk that the deal's terms may change. I just bought 40 shares of ROH today. ROH is selling at around $68/per share, and DOW's offer was to buy them at $78/per share.

BUD is another possible arbitrage play, but I have not bought any shares of BUD.

The efficient market hypothesis would say that the lower price is due to the risk that the deal will not get financing and will collapse; however, in a world of 1% interest rates, that kind of risk should not be providing an arbitrage opportunity of 10% or more. Warren Buffett, of course, hates and disagrees with the efficient market hypothesis. These are interesting times.

The information on this site is provided for discussion purposes only and does not constitute investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities or make any kind of an investment. You are responsible for your own due diligence.