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# BMY-MJN Tender Results

Discussion in 'Trading' started by livevol_ophir, Dec 18, 2009.

An update to the previous post.

Preliminary Results
NB: There is a three day protect so we will not know for certain until then.

500,547,697 shares of BMY ended up being tendered (out of a total possible of 2 billion shares).

Since a total of 270 million were able to be tendered and converted to MJN (see earlier blog for details) the conversion ended up being: 270/500.5 = 54%.

Recall we knew that at least 13.5% would be converted - though that lower bound was unrealistic for a number of reasons (again, I direct the reader to the original blog).

Here's how the math worked out:

Version 1: If we guessed everyone would tender
Bought 100 shares BMY for 25.68 (the price as of the first blog).
Sold 14 shares MJN @ 42.49 (the price as of the first blog).

To clean up: Sell your net 20 shares MJN and sell your net 46 shares BMY. Done.

Final Pnl:
\$9.66 (long BMY) + \$12.46 (short MJN) + \$27.68 (converted shares) = \$49.80
Or, \$49.80/114 = \$0.44 per share.

Version 2: If we guessed a 50% conversion rate
Bought 100 shares BMY for 25.68 (the price as of the first blog).
Sold 50 shares MJN @ 42.49 (the price as of the first blog).

To clean up: Buy your net short 16 shares MJN and sell your net 46 shares BMY.

Final Pnl:
\$9.66 (long BMY) + \$44.50(short MJN) + \$27.68 (converted shares) = \$81.84
Or, \$81.84/150 = \$0.55 per share.

Updated blog details: