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QGC - SGL takeover - Instant 30% return?!?

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Rasman

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20 January 2006
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I am obviously missing something here.

QGC is offering one QGC share in exchange for two SGL shares...

SQL is at 27c +/-
QGC is at 72c +/-

My maths says 2 x 27 = 54c
My maths also says 72-54 = 18c

My maths says buy 7500 SGL shares for $2025 +/-
My maths says trade 7500 SGL for 3750 QGC shares
My maths says sell 3750 QGC shares for $2700 +/-

Please somebody, what am I missing?
 
Rasman

Nothing wrong with your maths!

Scenerio 1 - Jump in quick before price rises to 36c for SGL

Scenerio 2 - SGL share holders seeing their share jump so quickly to 36c (as above) feel that their shares are worth more and therefore reject QGC offer.
QGC withdraw their offer and SGL slumps back to what they are now.

Scenerio 3 - QGC share holders seeing that their shares are being diluted to the advantage of SGL share holders bail out of QGC and its price falls accordingly to double that of SGL (54c).

Scenerio 4 - SGL surges to 36+c but QGC withdraw their offer becuase of shareholder backlash or whatever and SGL shares drop to dismay of new SGL shareholders.

Scenerio 5 - SGL shares rise to 31.5c (63c for two) and QGC falls to 63c
(63c is mean of 2 times SGL and 1 QGC share).
 
shouldnt there be a cut off date of when do you need to own the SGL shares to be eligible for this offer?
 
doctorj said:
Nothing like the sweet smell of arbitrage in the morning ;)
Click to expand...

hehe do u think a "limit order" or a "at market" will be more successful?

if limit order what price?

Thanks

MS
 
Hi, aren't that going to be issuing 2x batches of 60 cent shares to the market? From the little I read, they will be QGC shares. Am I missing something or have they just devalued their current QGC shares?

Cheers,
 
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