As mentionned in a previous post, BCE shares present a big arbitrage profit opportunity. At the time of my first mention, the shares traded at $39.79 on the TSX with an offer price of $42.75 to be paid in December. Today, BCE shares closed at $39.13 after reaching a day's low of $38.27.
This drop is most probably linked to fears about the financing of the deal. Indeed, after Fannie and Freddie, now Lehman is worrying the markets. People are scared that the crisis is far from over and doubt more and more that BCE's buyers will be able to get the financing. After all, it is the largest takeover in Canadian history.
Stock Market Investment Partner will leave you the task of determining if the risk-reward relation of this arbitrage is right for your own financial situation.
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