Jun. 25 at 9:27 AM
$GOGL Got a confirmation from IR, there is clearly a spread in favor of Gogl.
"GOGL shareholders will receive 0.95 CMBT shares for each GOGL share they own.
The price/value ratio therefore depends on the actual market price of GOGL and CMBT shares at the time the merger is executed.
For example: GOGL at
$7.54 per share, CMBT at
$9.32 per share. 1x GOGL = 0.95 x CMBT (with a value of approximately
$8.85).
One would expect the spread between CMBT and GOGL to have narrowed by now, given the high likelihood of the proposed merger.
However, due to the limited free float of CMBT, there is little to no possibility to borrow CMBT shares, making it difficult to set up short positions.
As a result, typical arbitrage funds cannot apply their usual strategy of going long on GOGL and short on CMBT, which limits arbitrage opportunities and keeps the spread intact."
