Hi All!
The price of the PVG purchase by Newcrest in US dollars as about $14.71 as I type (C 18.50), yet the current PVG stock price is $13.25…allowing for about 11% arbitrage returns in a couple of months (deal expected to close this quarter).
Is there significant expectation the deal won’t close? Anybody have thoughts on this?
Cheers!
Murph
BL Home Fool
(long PVG)
I should have added that PVG shareholders have the option of C $18.50 in cash or .80847 share in Newcrest.
Those who don’t elect cash or Newcrest shares, subject to proration, will get C $9.25 and .40427 Newcrest share.
So, the price of gold and the price of Newcrest shares might enter into calculations, but if a PVG shareholder chooses cash, they get it, right? Or is that subject to some sort of limit/proration as well?
Cheers!
Murph
…and yes, the total deal is subject to 50/50 cash/shares proration:
"…Pretivm shareholders will have the option to elect to receive C$18.50 per Pretivm share in cash or 0.8084 Newcrest shares per Pretivm share, representing share consideration of C$18.50 based on the Canadian dollar equivalent of the 5 day volume-weighted-average-price (VWAP) of Newcrest shares on the Australian Securities Exchange (ASX) ending on November 8, 2021, subject to proration to ensure aggregate cash and Newcrest share consideration each represent 50% of total transaction consideration (the “Transaction Price”). Pretivm shareholders who do not elect cash or Newcrest shares (subject to proration) will receive default consideration of C$9.25 per Pretivm share in cash and 0.4042 Newcrest shares per Pretivm share…
So, does that justify an 11% arbitrage in 1=2 months?
I don’t know Newcrest…anyone care to opine?
Cheers!
Murph
“I should have added that PVG shareholders have the option of C $18.50 in cash or .80847 share in Newcrest.”
There were 4 or 5 options but according to Fidelity those options all closed 2 days before I received notification from them on the 13th, thanks to the USPS
So, your first option is the default and that’s what I’m planning on getting.
If the deal meets approval status it should close before the end of first quarter.
Regards, Ken
Thanks Ken!
Looks like the USPS failed me too…got zero notice; also brokerage is supposed to notify me…nada.
In the end, it was my fault…should have been on top of it.
Ah well, any thoughts on the complicated arbitrage involving Newcrest’s and PVG’s stock prices, forex currency risk, and the odds that the deal goes through etc.?
Cheers!
Murph
NOT a clue… also known as being clueless!
Take care,
Ken
Good luck metal heads!!!
All the best,
Ken