I purchased a COTY buy/write at Jan 2020 8 strike price for 5.87 back in DEC. Obviously, the stock price has far exceeded that strike price for some time and now there is the tender offer. I am getting a message from IB, about the tender offer at 11.65/share. Does anyone have any advice on what to do? Currently, the value of the buy-write is about 7.8. I am a bit unclear as to why the short holder of the call hasn't done early exercise. Is the tender offer for 11.65 only if you held the shares as of a certain date?
BTW this whole COTY thing is nothing special, just a tender for a few shares. Maybe you assume it's a takeover or something, but it isn't. Nothing has changed after the tender.........
Why is the stock trading below the tender offer, coudn't I just buy shares right now at 11.22 and then sell them to JAB for 11.65?
1) The probability of JAB going through is not 100% 2) How can you sell all your shares to JAB if everybody wants to do that?
This is the message from IB, it says guaranteed delivery. Cottage Holdco B.V. has offered to purchase up to 150,000,000 shares of Coty Inc. Class A Common Stock. The terms of the offer are as follows (subject to proration): Option 1 - Take no action Option 2 - Tender shares for cash: 11.65 USD per share tendered and accepted, less any applicable withholding taxes Odd lot Priority: No Guaranteed Delivery: Yes Last day to purchase shares and be eligible to tender: 2019-03-29 The deadline to submit shares to this offer will be 2019-03-29 @ 13:00 (America/New_York). In the absence of an election, no action will be taken.
Maybe you translate the words "Guaranteed Delivery" to something you expect/want to happen. However, this is just the name of a parameter in a tender (i.e. not a full description of its effect)..........
Should I accept and if they purchase at 11.65 I can buy the equivalent shares the next day at the sub 11.65 price? To cover my sold call,